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Key Takeaways
- Tesla shares jumped more than 5% on Monday, the latest in a series of big price moves this month, after Morgan Stanley named the EV maker its top U.S. automaker pick.
- Tesla shares broke above a descending channel on above-average volume earlier this month, but have since retraced to the pattern’s top trendline, potentially flipping the area from prior resistance into future support.
- The 50-day moving average crossed above the 200-day MA in Monday’s trading session to generate a golden cross, a bullish chart pattern signaling the start of a new uptrend.
- The Tesla shares price may encounter overhead selling pressure at key chart levels including $300, $384, and $415.
Tesla (TSLA) shares jumped on Monday after Morgan Stanley named the EV maker its top U.S. automaker pick, replacing Ford (F). The investment bank touted the company’s energy business, arguing that it could surpass its vehicle business in value over time as investors gravitate to firms that address climate-related issues.
The bank also pointed out that Tesla could boost its zero-emission vehicle credit revenue as traditional automakers scale back their EV production plans amid a slump in demand and intensifying competition within the industry.
Tesla shares gained 5.6% to $232.10 on Monday, the latest in a series of big moves this month. The stock started the month below $200 and added 37% by July 11 amid optimism about better-than-expected vehicle delivery numbers. The stock then gave back much of that gain by last week amid a broader tech sector selloff and following a disappointing earnings report.
Below, we take a closer look at the EV maker’s chart and turn to technical analysis to point out important price levels that may come into play as the company navigates the road ahead.
Prior Resistance Possibly Turning into Support
Tesla shares broke above a descending channel on above-average volume earlier this month, but have since retraced to the pattern’s top trendline, potentially flipping the area from prior resistance into future support.
Importantly, investors have defended this level in recent trading sessions, suggesting the current pullback may have concluded.
Moreover, the 50-day moving average (MA) crossed above the 200-day MA in Monday’s trading session to generate a golden cross, a bullish chart pattern signaling the start of a new uptrend.
Watch These Key Resistance Levels Amid Upside
If the price continues higher, investors should monitor three key areas on the chart where Tesla shares may encounter overhead selling pressure.
An initial resistance level sits around $300, an area on the chart where market participants may be happy to book profits near a multi-year horizontal line connecting multiple peaks and troughs from December 2021 to July last year.
Further upside could drive a move up to the $384 region, where the shares may attract sellers near the April 2022 swing high that formed in the early part of the stock’s downtrend between November 2021 and January 2023. Interestingly, a bars pattern, which extracts the two bullish moves in the stock from January to July last year and positions them from the April swing low, projects a target just below this level.
Finally, a breakout above this location could lead to a retest of $415 level, where Tesla shares would likely face significant resistance around their all-time high (ATH) set in early November 2021. Such a move would imply upside of nearly 80% from Monday’s closing price.
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As of the date this article was written, the author does not own any of the above securities.