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Tesla Stock Alert: Record Levels in the Offing?

Tesla is starting off the year by rallying after better-than-expected delivery results for the fourth quarter. Here's the trade.

Tesla  (TSLA) - Get Tesla Inc Report is starting off the year by rallying after the electric-vehicle major reported its quarterly delivery results, which clearly wowed Wall Street.

Tesla delivered 308,000 vehicles last quarter, a quarterly record. In all, the company delivered 936,000 vehicles for the year, almost double its 2020 tally.

Further, the company said, “our delivery count should be viewed as slightly conservative.”

For what it’s worth, NIO  (NIO) - Get NIO Inc. (China) Report, Xpeng  (XPEV) - Get Xpeng Inc Report and Li Auto  (LI) - Get Li Auto Report also posted better-than-expected fourth-quarter delivery results.

NIO is up nicely on the day, but Xpeng and Li are struggling. 

Tesla is ripping higher and could be looking at new highs in the not-too-distant future.

Trading Tesla Stock

Daily chart of Tesla stock.

Daily chart of Tesla stock.

After hitting an all-time high of $1,243.49 in November, Tesla stock has been trading a wide-ranged downward channel.

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This period of consolidation was sloppy for the stock, as it gyrated around a number of key moving averages.

Coming into Monday, Tesla had fallen in four sessions, but it continued to hold the 10-day and 50-day moving averages. This boded well for the bulls, even though the stock was under pressure.

With today’s surge, Tesla stock went weekly-up over $1,119 and so far, the stock is holding onto its gains.

From here, the next level to watch is $1,173, the high from last month. If we get a monthly-up rotation over the December high, it puts $1,200 in play, followed by the all-time high up near $1,240.

The $1,200 area was decent resistance last quarter, so it will be interesting to see how Tesla stock handles the $1,200 to $1,240 zone should it get there.

If the stock is able to make new all-time highs, it will, of course, have the bulls looking up to see where the next upside target may come into play.

Given the wide fourth-quarter trading range, longer-term bulls may consider using the 161.8% upside extension as their next target, all the way up at near $1,465.

On the downside, keep an eye on last week’s high at $1,119. A drop below that opens up the stock to a test of the 50-day moving average.

Otherwise, let’s see how the stock handles its short-term moving averages on a pullback.