Tesla Stock: The Charts Send A Clear Message
- Tesla Stock (TSLA) has been on a tear in 2023, gaining over 100% since the turn of the year.
- However, the stock has seen strong resistance at the 200-day EMA in the last few weeks.
- Despite this, TSLA is still above the 200-week EMA and on a strong uptrend on the weekly chart.
Figure 1: Tesla Stock: The Charts Send A Clear Message
Tesla
Many Wall Street players have had their doubts about Elon Musk’s Twitter acquisition and the impact it would have on Tesla.
But the electric vehicle pioneer has ridden the skepticism by more than doubling its share price in the first quarter of 2023 – moving from a low of around $101.81 in January to a high of about $217.65 in February. The world's largest EV maker was trading at around $192.58 as of Tuesday, April 4.
So, what does the future hold for this tech giant from a technical analysis perspective?
TSLA Technical Analysis
Figure 2: TSLA Daily Chart
BigCharts
Looking at TSLA’s daily chart, it is evident that the stock is encountering significant resistance at the 200-day EMA. This has been the case since early February. Each time the stock price has reached the 200-day EMA, it has been met with resistance and resulted in a price pullback.
This resistance can be attributed to the fact that many mutual fund managers and other large institutional investors use the 200-day EMA as a guide. Therefore, every time the stock approaches the 200-day EMA, those who purchased the stock at lower prices view it as an opportunity to take profits.
Additionally, short-biased investors perceive this as an opportunity to initiate short positions, which explains why there has been significant selling at the 200-day exponential moving average.
What is the outlook for Tesla stock?
Figure 3: TSLA Weekly Chart
BigCharts
On the weekly chart, TSLA is currently trading above the 200-week EMA. In fact, following a recent pullback, the stock found support on the 200-week EMA in March and began to rise again.
However, it was once again rejected by the 200-day EMA this week, which coincided with the stock coming under pressure after the company's second-quarter delivery results were released.
Nevertheless, TSLA has established an upward trendline (pink line above) and, eventually, the stock is likely to break its 200-day EMA. Should this occur, and the stock remains strong, it will likely test the next key resistance level at around $300.
Longs that jump in today, therefore, could ride this stock up by over 60% if or when, indeed, it reaches the target of $300.
Ask Twiter
From a technical perspective, Tesla stock has been fighting its 200-moving average, but the overall trend in 2023 has been overwhelmingly positive. Where will TSLA most likely be by year-end?
