Technical Analysis – Tesla stock unable to breach swing high; returns to 200-day SMA

Anthony Charalambous, XM Investment Research Desk

Tesla stock currently holds at the 200-day simple moving average (SMA) located at 254, which is also the 38.2% Fibonacci retracement of the down leg from 379.21 to 176.65. Sellers reversed the price – ahead of the resistance at 266 from July 24 – back down, denying further gains.

The short-term oscillators are cautiously skewed towards a price improvement. The MACD, remaining above its red trigger line in the positive zone, has declined closer to it. Moreover, in the bullish territory the RSI is rising again. The now upwards sloping 20-, 40- and 100-day SMAs suggest that the price may advance in the following sessions.

If the bulls resurface and drive the price back up, initial resistance could come from the durable 266 resistance level. Violating this could push the price to test the 50.0% Fibo of 278 ahead of the 295 swing peak of April 3. Moving higher, the 61.8% Fibo at 302 could hinder the test of the resistance region of 320 to 324, consisting of the peaks from January and February.

To the downside, if sellers penetrate below the 254 level, the 20-day SMA which lies around the 244 support could initially test the bears. Moving lower, the 40-day and 20-day SMAs at 239 and 232 respectively, may apply some pressure before the 23.6% Fibo of 225.

In brief, the short-term looks to be neutral within 211 – 266, despite the recent move up from August 22. However, a break above 266 would shift the short- and medium-term bias to bullish, while underneath the swing trough of 211, the negative sentiment could gain strength.