Tesla share price: was that it?
Has the sell-off in Tesla come to an end, or does a recent lack of momentum point to more losses?
Tesla shares see eye-watering volatility
From the beginning of September Tesla lost 42.8% peak-to-trough, before rebounding to have gained 38% from the month low to the current level. This is an eye-watering level of volatility for anyone.
But all this sound and fury has left the uptrend firmly intact. Indeed, the brief dip below the 50-day simple moving average (SMA), which is currently $361, was quickly bought, and it looks like we merely saw the stock suffer a brief period of being overextended. The dip to the 50-day SMA was enough to ‘reset’ the rally. Gains have stalled at $450 however, so bulls will be worried that bullish momentum is ebbing away once again.
That being said, one lower high does not a sell-off make, and bears will have to be very careful about assuming that the rebound from the month low is done and dusted. While a small short position might be justified, the possibility of a renewed move higher should be kept in mind. Further declines would bring the 50-day SMA back into play, and then below this the September low at $306.50 comes into view.
If there is a bearish view in place, then the hourly chart provides it. Trendline resistance from the peak in late August has been respected, with the bounce into Monday’s session running out of steam below $460. Crucially, the rebound from the September low fell below trendline support at the same time and has been unable to recover it for the time being.
Bullish view after $460
Dips in recent sessions have found support above $407, so if this holds and the price can recover $460, then a more bullish view that targets the recent high comes back into play.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get commission from just 0.08% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets