Watch These Tesla Price Levels as Stock Tries to Jumpstart Rally
Tesla (TSLA) shares jumped more than 4% on Wednesday, bucking a broader downturn for large-cap technology stocks. Although Tesla shares have gained around 25% over the past three months, they have remained in a holding pattern since late July as investors wait for further updates about the company’s vehicle deliveries, its eagerly-anticipated robotaxi event, and third-quarter earnings, all of which are expected next month.
Symmetrical Triangle Takes Shape
After breaking out above a multi-month downtrend line in early July, Tesla shares consolidated for several weeks before reversing back below the indicator. More recently, the EV maker’s stock has traded within a symmetrical triangle, indicating a pause in price action before potentially making another trending move.
Upon a decisive breakout or breakdown from the pattern, investors should monitor several key chart levels likely to attract attention.
Breakout Price Levels to Watch
A volume-backed breakout above the triangle and multi-month downtrend line could see the shares rally up to the $265 area, where they would likely meet overhead resistance from the December and July swing highs.
Further buying could drive a move up to around $300. This area on the chart would likely encounter significant resistance from a horizontal line connecting multiple peaks and troughs from December 2021 to July last year.
Breakdown Levels to Monitor
A breakdown below the symmetrical triangle could see an initial fall to the $185 level, an area likely to encounter buying support near the neckline of an inverse head and shoulders pattern that formed on the chart between February and June.
Ongoing weakness in the stock may spark a decline down to the $152 region, an area on the chart where bargain hunters may look for buying opportunities near the April 2023 swing low, which also coincidentally sits just above the April 2024 swing low.
Investors should keep a close eye on these key breakout and breakdown levels as they can provide valuable insights into the future direction of Tesla’s stock. However, it’s important to note that technical analysis is not foolproof and should be used in conjunction with other forms of analysis and information.
As always, it’s crucial for investors to conduct thorough research and consider their own risk tolerance and investment goals before making any trading decisions.
Disclaimer: The comments, opinions, and analyses expressed in this article are for informational purposes only and should not be considered as individual investment advice. The author does not own any of the securities mentioned.
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