Tesla, Inc. (NASDAQ: TSLA) seems to be poised for a price surge as per its latest charts. The company designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems in the United States, China, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage.
Bullish Indications
#1 Downtrend Channel: As you can see from the daily chart, the stock has been trading within a downtrend channel during the past few weeks. This is marked in the daily chart in purple color. Currently, the stock is moving higher from the lower rail of the downtrend channel and looks poised for a breakout. Once the stock breaks out from a downtrend channel, it has the potential to move further up.
TSLA – Daily Chart
#2 MACD Above Signal Line: In the daily chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered bullish.
#3 Bullish Stoch: The %K line (blue color) is above the %D line (orange color) of the stochastic in the daily chart, indicating possible bullishness.
#4 Bullish RSI: The RSI is moving higher from oversold levels and is currently nearing 50 as seen in the daily chart. This indicates possible bullishness.
#5 Fibonacci Support: Usually, after an up-move, stocks typically retrace to any of the key Fibonacci levels before surging back again. The stock had taken support at the 23.6% Fibonacci support level before moving higher, as seen in the weekly chart. The Fibonacci support levels are marked as orange color lines. An upmove from Fibonacci support level typically indicates bullishness.
TSLA – Weekly Chart
#6 %K above %D: The %K (blue) line of stochastic has currently crossed above the %D (Orange) line in the weekly chart as well and is also moving higher from oversold levels. This is a possible bullish indication.
#7 Bullish RSI: In the weekly chart, the RSI is currently moving higher from oversold levels. This is a possible bullish sign.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of TSLA above the price of around $135.30.
TP: Our target prices are $150 and $160 in the next 3-6 months.
SL: To limit risk, place stop-loss at $127.00. Note that the stop-loss is on a closing basis.
Our target potential upside is 11% to 18% in the next 3 to 6 months.
For a risk of $8.30, our target rewards are $14.70 and $24.70. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the trend channel with a high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
Happy Trading!
Tara
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