Tesla (TSLA) Stock Price and Forecast: Tesla powers through $635 resistance

FX
  • Tesla shares break $635 in a powerful surge.
  • TSLA had been making slow but steady progress higher but has now charged ahead.
  • $667 above is the next level but the volume profile predicts a struggle.

Update: It is nice when things work out and some nice calls on Bitcoin and Tesla this morning have helped reaffirm the importance of the technical views in equity markets. Tesla broke the key $635 level we identified and accelerated through it as we also predicted. “The volume profile to the right of the chart shows how volume drops off above $635 and does not kick in until $660, so a break should accelerate,” our call from this morning. Tesla’s Model was named in number 1 spot by cars.com’s American-made index and Bitcoin bouncing has also helped sentiment. 

Tesla shares are still struggling for direction but are moving in the right direction, albeit slowly. Tuesday saw further small gains as the stock closed up just 0.4% at $623.71. The electric vehicle sector leader has been making steady progress since bottoming out in early March at $539. Tesla returned to test this support zone in late May and has been trading along with the 200-day moving average ever since. 

Tesla key statistics

Market Cap $601 billion
Price/Earnings 621
Price/Sales 21
Price/Book 26
Enterprise Value $753 billion
Gross Margin 21%
Net Margin

3%

Average Wall Street Rating and Price Target Hold, $652

Tesla stock forecast

Tuesday’s move continued the recent slow but steady progress Tesla shares have been making. Importantly, the 9-day moving average is now acting as a nice guide for support to higher levels. The 200-day moving average is also finally starting to recede into the distance. Tuesday’s candle was a continuation and crucially green and bullish as Monday was a bit indecisive. Monday saw a red engulfing candle as traders struggled for directional bias. Tellingly, the volume profile on both days was skewed toward the high end of the daily range.

For now, the short-term risk-reward remains skewed marginally to the upside. $635 really is a better entry point for fresh longs as a break is bullish and should lead to renewed momentum. The volume profile to the right of the chart shows how volume drops off above $635 and does not kick in until $660, so a break should accelerate. Traders already long should keep an eye on the 9-day moving average, which is currently guiding higher. Because of this it is best to use a trailing stop to try and ride the hopeful trend higher. Momentum indicators are beginning to also tick higher and confirm the price action. Both Relative Strength Index (RSI) and Commodity Channel Index (CCI) remain in neutral territory. 


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