The Rise of Tesla: Analyzing Stock Price Levels Ahead of Q2 Deliveries Report
Tesla (TSLA) shares surged over 6% on Monday, reaching their highest level since January, fueled by growing optimism surrounding the legacy electric vehicle manufacturer’s highly anticipated second-quarter deliveries report scheduled for release on Tuesday. As investors eagerly await this key update, technical analysis reveals intriguing patterns and potential price levels to watch in Tesla’s stock movement.
Forming an Inverse Head and Shoulders Pattern
Despite a downward trend following the ominous death cross signal triggered by the 50-day moving average crossing below the 200-day moving average, Tesla’s stock has been carving out an inverse head and shoulders pattern. This pattern, characterized by three distinct troughs – a lower “head” between two higher “shoulders,” typically signifies a shift from a bearish to bullish trend once the price breaks above the pattern’s neckline, which occurred at the end of last month.
Recent market activity saw Tesla’s share price surging on Monday, closing above the 200-day moving average with the highest trading volume since late April, indicating strong buying conviction among investors.
Key Levels to Monitor for Further Upside Potential
If Tesla’s stock continues its upward trajectory, several critical levels on the chart merit close observation. The first notable area is around $232, where a trendline connecting two significant swing highs from July to December last year is likely to act as overhead resistance. A breakout above this level could propel the stock towards last year’s high at $299.29, just below three successive peaks recorded in August and September of 2022 around $314.
RSI Signals Short-Term Overbought Conditions
While the relative strength index (RSI) breached into overbought territory above the 70 threshold on Monday, confirming bullish momentum, it also suggests the potential for short-term pullbacks. In the event of a retracement, the $189 level is worth monitoring as it is likely to attract buying interest near the inverse head and shoulders’ neckline.
Following Monday’s surge, Tesla shares closed at $209.86, reflecting a 6.1% gain for the day.
Investopedia provides these insights for informational purposes only. For more information, refer to our warranty and liability disclaimer. The author of this article does not hold any of the securities mentioned as of the publication date.
As Tesla gears up to unveil its second-quarter deliveries report, investors are closely watching these key levels and patterns in the stock price movement. Stay tuned for updates on Tesla’s performance in the electric vehicle market.
Original Article: Investopedia
