Tesla (TSLA) stock just posted its second 10%+ rally in two weeks – something that hasn’t happened since last summer. And this move isn’t just noise, it looks to be the first move in a technical turnaround for the EV manufacturer.
The buying is tied directly to two big catalysts that have the potential to drive Tesla’s next bull run.
Fast Bullish Fundamentals Shift
First, the robotaxi story is back in play.
On Thursday afternoon, Transportation Secretary Sean Duffy unveiled a new framework for self-driving cars, prioritizing safety, innovation, and commercial deployment.
The move is a huge win for Tesla, which has bet the farm on autonomy.
Elon Musk has made it clear—if you don’t believe Tesla will solve autonomy, you shouldn’t be in the stock. That was his message back in April 2024, and Duffy’s announcement gives fresh life to Musk’s long-term vision.
But the headlines don’t stop there.
Investors are also reacting to news that Elon Musk plans to return to a more prominent, hands-on role at Tesla.
Love him or hate him, Musk’s leadership has always been the X-factor behind Tesla’s bold moves. The prospect of his increased involvement couldn’t come at a better time for a company that’s looking to reassert its dominance in the EV and autonomous space.
Tesla is now the strongest performer in the consumer discretionary sector – a sector that’s otherwise limping along this week as airline stocks warn of slowing travel demand due to economic concerns. While the rest of the sector pulls back, Tesla is taking its first leadership role in more than six months.
Tesla’s Technicals Signal a Bull Run
Today’s rally in Tesla is making for an interesting technical setup.
For the first time in more than three months, Tesla looks poised for a legitimate 20-30% rally.
The stock has finally pushed above its 50-day moving average (currently at $270.39), something it hasn’t done since January. But this isn’t just a simple moving average breakout.
Tesla has formed a textbook double-bottom pattern—a pattern that ranks among the most bullish setups in technical analysis.
A double-bottom signals that the stock has successfully retested its lows and found real support. This is the kind of price action that builds investor confidence because it suggests that the worst may be behind for the stock. The move stands in sharp contrast to what we’re seeing across most stocks right now, where lower lows and weaker rallies dominate the charts.
Since reporting Q1 results earlier this week, Tesla shares are up more than 20%. Today’s move above its 50-day and the double bottom suggests higher prices over the next 4-6 weeks.
The next key level is the 200-day moving average, sitting at $291.
That trendline is in a bullish slope, adding fuel to the rally. If Tesla can break above that 200-day mark, it’ll be the “all-clear” signal for a move toward $340 – the site of several major consolidations over the last year.
Adding to the potential higher price is the fact that Tesla is one of the auto manufacturers that is better positioned in the trade war. Investors can assume that any tariff deals will help Tesla lead the market higher and the lack of deals will act as less of a headwind for the company.
Tesla’s long-term outlook remains Neutral as the stock is testing its 20-month moving average ($250). The stock’s short-term outlook is bullish with a price target of $340-$350.
— Chris Johnson
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Source: Money Morning
