It spent the entire year as one of the most heavily shorted stocks on the market -- as well as one of the best-performing. Shares charged more than 46% higher over the course of the year, and yet almost all of that price action came in the first half of the calendar year.
The same sort of duality has been true for Tesla's fundamentals.
The firm hit a major milestone when it started shipping its eagerly anticipated Model 3 sedan -- its lowest-cost car ever -- but missed production targets set by Wall Street. And while the announcement of the Tesla Semi and new Roadster, both unveiled at an event in November, got Tesla fans re-energized, doubters were quick to point out that there are major production challenges that Tesla needs to figure out before it starts delivering either vehicle.
In short, this stock has been a confounding trade for most market participants. And that isn't likely to change as the calendar flips to 2018.
The good news is that the price action reveals some likely moves for Tesla as we head into the new year. To figure them out, we're turning to the chart for a technical look at this electrified auto stock.
Tesla's 46% gain stat might be a little deceptive. That's because shares have had anything but a clear up-and-to-the-right price trajectory in 2017. Instead, this stock rallied hard in the first six months of the year, then spent the rest of 2017 tracking sideways in a well-defined but wide-ranging consolidation channel. That sideways channel is bounded by trendline support down at $300 and $380 resistance to the top-side. Those important price levels hold the keys to Tesla's likely price trajectory for the year ahead.
Simply put, if Tesla violates $300 support, we've got a strong sell signal in shares. Conversely, if Tesla can muster the strength to break above $380, we've got a brand-new buy signal.
At this point, it's too early to say which of those levels is going to win out.
Tesla's fourth-quarter earnings report in February could be the next major catalyst that pushes this stock's price through one of those levels. That's good reason to keep a close eye on TSLA here. Any big surprises in Model 3 deliveries or Tesla Semi presales could send this stock moving in a big way.
From a trading standpoint, the picture is a lot clearer: If shares violate $300, you don't want to own TSLA anymore. And if it pushes through $380, there's a big new buy signal in this stock.
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