Technical Analysis – Tesla stock continues descent; retraces until the 76.4% Fibonacci


Anthony Charalambous, XM Investment Research Desk

Tesla’s stock price has corrected from the all-time highs piercing below the 50- and 100-day simple moving averages (SMAs) to touch a nearly three-month low of 394.97, which is just below the 76.4% Fibonacci retracement of the up leg from 218.21 to 967.49, of 395.83.

The whole aggressive down move, which began on February 19, seems to have stalled around the 76.4% Fibo of 395.83. That said the MACD, in the negative region, is currently declining below its red trigger line, while the RSI and the Stochastics continue to reside in oversold territory. Moreover the SMAs bullish bearing seems to be wavering, which all together signal further downside corrections.

Moving below the 395.83 hurdle, the 200-day SMA at 370.40 could prove to be a difficult obstacle to conquer. If selling interest continues, the stock could reach a cluster of supports involving the 326.22, 308.90 and 288.90 levels respectively.

If the price pivots at the 395.83 point, first resistance could come from the 472.05 level ahead of the area from the 495.83 resistance to the 61.8% Fibo of 505.00, where the 100-day SMA also lies. Clearing this, the 540.83 inside swing low may apply some friction before the 50.0% Fibo of 593.37 and 603.97 barrier overhead. If the climb continues, the price could see the 50-day SMA at 659.65 and the 38.2% Fibo of 681.75.

To sum up, the down move seems to be overstretched and only a close below the 200-day SMA at 370.40 could see the near-term negative bias continue.