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Tesla Back to New Highs? Let's Look at the Chart.

Tesla stock is erupting, working on its fifth straight daily gain. Are new highs in its future?

The market started strong Monday, then hit some turbulence. One could say that for Tesla  (TSLA) - Get Tesla Inc Report, too.

While the Palo Alto, Calif., electric-vehicle major's shares are still up 3.5% on the day, they were up as much as 5.7% earlier on.

That came on reports that Tesla would be introducing the Model S Plaid in China in the first quarter of 2022.

That jolted the stock price. It also helped that  (NIO) - Get NIO Inc. Sponsored ADR Class A Report NIO shares were flying higher.

Despite the slumping action we’re seeing in parts of the market — particularly high-growth stocks — Tesla is holding up.

Big surprise there, right?

Tesla bears may be fuming that the stock is not rolling over with the rest of the market, but it’s clear that Tesla has established itself as a dominant entity. 

Can the run continue?

Trading Tesla Stock

Daily chart of Tesla stock.

Daily chart of Tesla stock.

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Last Monday, Tesla gave the bulls a great reversal setup when it broke below the prior week’s low near $987.

The stock was able to reverse those losses, then power up. It closed at $1,013 on Monday, up about $26 a share from that bull-reversal trigger.

Now working on its fifth straight daily gain, Tesla stock at its highs earlier today was up almost $200 a share from the entry trigger.

Now we’re in a bit of an interesting position.

On the downside, let’s see that Tesla stock can hold the 10-day and 21-day moving averages on a dip. If these measures fail to support the share price, we could see a break back down toward $1,000.

That doesn’t become a pressing issue unless Tesla breaks below $1,000, putting the past two weeks’ lows in play at $987 and $978, respectively.

On the upside, let’s see if the shares can fill the gap up toward $1,208. Above the gap-fill level puts the $1,243 highs in play, followed by the two-times range extension near $1,255.

While volatile, Tesla continues to hold up pretty well. How it handles its short-term moving averages may tell traders a lot of what they need to know about it going forward.

A dip to the 10-day moving average that holds as support is bullish. Below this measure and a few warning flags will start waving.