Technical Analysis – Tesla stock maintains positive picture; rally takes a breather


Anthony Charalambous, XM Investment Research Desk

Tesla sellers are currently attempting to halt further gains past the 360 hurdle. The stock gapped above the 200-day simple moving average (SMA) and the 266 swing high of July 24, overstretching the price, resulting in nearly all the declines from December 2018 to June 2019 being recouped.

The short-term oscillators presently continue to reflect an improving picture but warn that the sentiment could shift to the downside. The MACD remains deep in the positive region but has marginally slipped below its red trigger line. The RSI is in the overbought territory but has slightly declined. Despite this, the SMAs continue to signal appreciation in the price with their upward slopes and the recent bullish crossover of the 200-day SMA by the 100-day one.

If buyers retake control and drive the price above the high of 360, a retest of the 379.21 peak from December 7 could unfold. Overtaking this now nearly 1-year high, the bulls’ next obstacle could be at the 387 high from August 2018 before they encounter the 400 barrier.

Alternatively, initial upside pressure may come from the 341 support and the 20-day SMA located at the 331 level, which is the 76.4% Fibonacci retracement of the down leg from 379.21 to 176.65. Penetrating below could drop the price to test the swing low of 309 and the nearby 61.8% Fibo of 302 before tackling the 40-day SMA at 290.

Overall, the short-term bias is still cautiously bullish. However, a drop below the 341 level could start to turn the bias bearish but would only be confirmed below the 309 swing.