Tesla Inc (NASDAQ: TSLA) opened with a large gap to the downside on Tuesday and continued trading south for a while. That said, the stock hit support at 619.00 and throughout the session, it managed to claw back most of its early losses. Overall, Tesla continues to trade above the upside support line drawn from the low of June 26th, 2020, as well as above a longer-term line, taken from the low of March 18th, 2020. In our view, this keeps the overall outlook positive. However, since the February 8th, the stock has been drifting lower, below a downside resistance line, which means that the stock is currently in a corrective phase.
Despite yesterday’s rebound from 619.00, the share price remains below the short-term downside line, which suggests that the correction may not be over. If the bears manage to take charge from below that line, we expect them to aim for another test at 619.00, the break of which could extend the slide towards the low of December 10th, at 566.00, or the upside line drawn from the low of June 26th, 2020.
Shifting attention to our short-term oscillators, we see that the RSI runs below 30, but has just ticked up, while the MACD lies below both its zero and trigger lines. Both indicators detect strong downside speed, but the fact that the RSI turned up suggests that some further recovery may be in the works before the next leg south.
In order to start examining whether the prevailing longer-term uptrend is back in force, we would like to see a strong break above 760.00, marked by the low of December 17th. This may also take the stock above the pre-discussed short-term downside line and may initially pave the way towards the high of the day before, at 823.00. Another break, above 823.00, could extend the advance towards the 882.00 area, marked by the high of February 2nd, or towards the record peak of 900.29, hit on January 25th.
Credit: FX Street