Important points
Tesla (TSLA) stock hit a new all-time high on Wednesday as the stock rose for the sixth day in a row, extending its massive post-election rally.
Wednesday’s gains followed bullish comments from Wall Street analysts, including Goldman Sachs, which said EV makers’ efforts in self-driving cars and robotics would benefit from the artificial intelligence (AI) boom. Morgan Stanley analyst Adam Jonas called the stock “his stock.” Top pick. ”
Tesla stock rose 5.9% to $424.77 on Wednesday, its highest level since November 2021. The stock has risen about 70% since Election Day last month on optimism that CEO Elon Musk’s close relationship with President-elect Donald Trump could benefit. car manufacturer.
Below, we analyze the technicals on Tesla’s weekly chart and identify key price levels that investors may be watching as the stock moves into blue-sky territory.
Rising Tringle Breakout Accelerates
Tesla stock has continued its steep upward trend since breaking out of the ascending triangle early last month following the presidential election.
The Relative Strength Index (RSI) confirms the bullish price momentum with a value above the 70 threshold, but the indicator also warns of an overbought situation in the stock, increasing the possibility of short-term profit-taking. I am.
Considering that the stock has moved into price discovery mode, let’s move on to technical analysis to predict a potential bullish price target. We will also point out key support levels to look at when a decline is possible.
Bullish price target
Investors can use the measurement principle, also known as the “measured move” technique among chart watchers, to predict bullish price targets.
To apply this tool to Tesla’s chart, calculate the percentage change between the lower and upper trendlines of the ascending triangle and add it to the value of the pattern’s upper trendline. For example, apply a 121% increase to $265. This predicts a bullish target of $585.65, an area where investors can be happy and lock in profits.
Key support levels to monitor
During the retracement, investors should initially monitor the $380 level. This area is approximately 11% below Wednesday’s closing price and could gather support near several peaks that formed on the chart between November 2021 and April 2022.
If Tesla bulls fail to sustain this level, the stock could fall to around $300. Investors may try to pick up the stock at this location, close to the psychological round number and the trend line connecting the series of 12-month highs from July 2022 to last July.
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As of the date this article was written, the author did not own any of the securities mentioned above.
