Trading Tesla on Battery Day - Can the Stock Rally? - TheStreet

Trading Tesla on Battery Day - Can the Stock Rally?

Tesla is lower heading into its Battery Day event and annual shareholders meeting. Can bulls get the stock back in rally mode?
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Tesla  (TSLA) - Get Report shares were down about 5.5% in midday trading, even with the company’s Battery Day coming later Tuesday.

The automaker will hold its annual meeting and Battery Day event beginning at 4:30 p.m. ET. So far, investors have prepared for the event in a sell-the-news fashion (and thanks to CEO Elon Musk’s tweets).

Shares were also volatile on Monday, trading in a near-$50 range, which is quite wide for a stock that closed for trading near $442 last week.

The event has bulls looking for an opportunity to take Tesla back up, potentially allowing the stock to retest its highs from Sept. 1st. On the other hand, bears are looking at the event as an opportunity to break the stock below support and send shares reeling.

Keep in mind, this name has been a juggernaut. Despite being 15% off the highs, shares are still up 783% over the past 12 months and more than 400% year to date.

Remember, that’s not from the stock’s lows in March, which highlights just how strong this name has been. Let’s look at the key levels ahead of Tesla’s event.

Trading Tesla Stock

Daily chart of Tesla stock.

Daily chart of Tesla stock.

There’s been a lot of drama in the electric vehicle space, and surprisingly, it hasn’t been from Tesla. That has come from Nikola  (NKLA) - Get Report. In any regard, Tesla has been volatile as of late, but it’s holding the 10-day and 20-day moving averages despite Tuesday’s dip.

Ideally Tesla will continue to hold these moving averages, as well as Monday’s low near $407.

A close below that level that doesn’t result in a quick reclaiming of these marks opens up the 50-day moving average as a possible support zone. This mark was support at the start of the month, when Tesla underwent a volatile correction.

Should Tesla close below the 50-day moving average, it puts the September low in play near $330, followed by the August low at $273. Near the latter, the stock also finds solid range support, while the former was a key breakout level in August.

The plus side about Tesla is that it tends to trade very technically level to level, as we found out earlier this summer during its monster rally.

As for the upside, bulls must keep an eye on the $455 to $460 area. That zone was resistance last week and on Monday.

A move over last week’s high at $461.94 (call it $462) could trigger a move back toward $500 and the prior all-time high at $502.49. Above that and the 361.8% extension is in play at $517.63.

A bullish reaction to Tesla’s Battery Day could give the stock the juice it needs to push higher into the quarterly sales number, which will be released in early October.