Tesla Shares Nearing Range Resistance

Tesla Shares Nearing Range Resistance

Tesla Shares Nearing Range Resistance

Tesla shares have been rallying strongly ever since breaking above the falling trend line on the daily time frame. Price has bounced off the range support around $180/share and is nearing the range resistance at $250-280/share.

Stochastic is moving down, indicating that buyers are exhausted and might need to let sellers take over. RSI is also starting to head south, which means that a selloff might take place. If the range resistance holds, Tesla shares could pull back from its recent climb.

The short-term 100 SMA is still below the long-term 200 SMA, suggesting that a selloff might be possible. If that happens, it would complete a head and shoulders pattern on the daily time frame and hint of further losses for the stock.

Tesla Shares Forecast

The path of least resistance is still to the upside though, as the latest set of developments from the company could keep prices well supported. The launch of the Tesla Powerwall had been a successful one for Tesla shares, promising better revenues from solar-powered home and industrial batteries compared to those coming from sales of electric cars.

The company still has a few new ventures in the pipeline, allowing investors to stay mostly upbeat on this stock’s potential. Further gains past the resistance could lead to a climb to $300/share and beyond, with most stock analysts keeping a buy recommendation on this share.

Tesla is set to unveil its less costly version of the electric car, which might be priced at around $35,000 and be more affordable for most Americans. This could generate stronger demand and sales, shoring up profits for the company in the following year. This unit isn’t set to go on sale until 2017, according to Tesla CEO Elon Musk.

The company’s chief technical officer JB Straubel remarked that this could pave the way for mass market adoption of electric cars, which would be good for Tesla shares.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.