Don’t Let Tesla’s Big Moves Fool You. Where the Chart Says the Stock Is Heading Next

Dow Jones11-02

Tesla stock fell on Friday, failing to take shares to akey leveltraders were looking for.

Coming into Friday trading, Tesla stock was down about 7% for the week, leaving share up about 1% year to date.Coming into Friday trading, Tesla stock was down about 7% for the week, leaving share up about 1% year to date.

Shares of the electric vehicle maker fell 0.3% to $248.98 while the S&P 500 and Dow Jones Industrial Average rose 0.4% and 0.7%, respectively.

The stock finished roughly $16, or 6%, away from $265, a level where it has run into resistance for months.

Resistance is a term used by technical stock market analysts that describes where investors have sold stock to take profits. It’s like an invisible ceiling for a share price.

Technical analysts don’t make fundamental calls on Tesla or other shares. They look at stock charts to get a sense of where a stock could go over the short and medium term.

Tesla shares broke through that resistance, closing at $269.19 this past Friday following better-than-expected third-quarter earnings. It was a sign that shares could be breaking through the ceiling.

But one close above $265 isn’t a trend and it’s a better sign if a stock can keep closing above key levels.

“A breakout would require two weekly…closes above that level to be confirmed [and] decisive,” says Fairlead Strategies founder and technical analyst Katie Stockton.

Confirmation didn’t happen. Tesla shares closed Thursday below $250, dropping 3%. The market deserved some of the blame. The S&P 500 dropped 1.9%, reacting badly to inflation data and earnings from Microsoft. Shares of the tech giant fell 6.1%

A failed breakout likely leaves Tesla stock trading in a range. The opposite of resistance is support. The $243 level is now “possible support,” adds Stockton. Below that, investors will be looking at 50-day and 200-day moving averages of about $$233 and $202, respectively.

It would have taken some heavy lifting to get shares north of $265. They needed a roughly 5% gain on Friday. Tesla stock has gained more than 5% in a day 227 times over its history as a publicly traded company, according to FactSet. That’s about 0.6% of the time.

It looks as if investors decided to take profits on Tesla stock, again, around $265. Earnings didn’t change that.

Through Friday trading, Tesla stock was up about 50 cents, or 0.2%, year to date. It’s a small move, but the path to flat has been wild. Shares were up about 80% from a 52-week intraday low reached in April. Shares were down about 10% from a 52-week intraday high reached after Tesla’s third-quarter earnings report.

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Comments

  • Cool Cat Winston
    11-03
    Cool Cat Winston
    $Tesla Motors(TSLA)$ will rocket! No stopping this beast!
  • breAkdaWn
    11-02
    breAkdaWn
    EM the King!
  • JediGingerNinja
    11-02
    JediGingerNinja
    It's the infrastructure of the internationally positioned gigafactories that positions tesla to reach the fastest delivery of technology to the masses on the entire planet. It's already game over. #Lovethestock
  • zelia
    11-02
    zelia
    Stop repeating this article. Try harder to talk down on Tesla. How many times u wan to repeat this article here???
  • zelia
    11-01
    zelia
    SO many hatets around. THe more the merrier. Pls keep shorting. So that the peice can go up even more
  • zelia
    11-01
    zelia
    So many sour grapes around
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