Incidentally, the stock is almost right back where it was in October and trades at $202.35, having more than doubled and rallied 113.8% in just six weeks.
Tesla (TSLA) weekly chart:
We can see on the weekly chart that the rally from $100 has been string and in a relatively straight line, and volumes rose to a two-year high to show fresh buyers entered the market and bears closed out. However, we’re approaching the broken neckline which could potentially prompt a pullback (or a consolidation), but the strong volume and price action suggests it could eventually break above it.
And whilst a bearish hammer formed two weeks ago, it was followed by a bullish engulfing week with higher volume to show demand at these highs. Therefore, a break below 187.61 assumes a pullback, but bulls may be interested in loading above this key level for a move to the neckline around $225.
Tesla (TSLA) daily chart:
The daily chart shows a small pullback withinside the range of a bullish engulfing candle at the highs. A small bullish hammer formed yesterday for a potential higher low above last week’s low, and the daily engulfing candle. After-hours trade also see it trade slightly higher. Also note that the 20 and 100-day EMA’s sit perfectly on last week’s low, making $187.61 an important support level for bulls to defend. RSI (14) remain positive above 50, so we’re looking for another burst higher on the daily chart.
- The bias on the daily chart is bullish above $187.60
- We anticipated a move towards the $220 - $225 area (along the neckline, depending on how quickly it gets there), where we may then see a pullback from the broken neckline
- Keep in mind the November high around $237.4 which could also cap gains over the near-term
- A break below $187.60 assumes a deeper correction, where we’d then look for evidence of a swing low around a Fibonacci number or the ‘gap support’ zone’ (at which point reconsider longs, in line with weekly volume and momentum)