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.

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