TSLA shares have traded at new highs above the $250/share level earlier in the month and is showing signs of retracing. The uptrend is strong on the daily chart but the stock could use a pickup in buying pressure.
Price could pull back to the previous peak near the $240/share level before resuming its climb. This is close to the 50 simple moving average, which has acted as support for price action since June. A sharper pullback could last until the previous lows near the $220/share mark for TSLA shares.
TSLA Shares Outlook
From there, a return of buyers could push TSLA shares to new highs, possibly until the $280-300/share levels, depending on the company’s prospects. A reversal, on the other hand, might lead to a move back to $200/share or until the 200 simple moving average.
MACD is reflecting weaker buying momentum at the moment, confirming that a retracement is likely. This could be a chance for buyers to go long TSLA shares at better prices and take advantage of the longer-term uptrend. RSI is also heading lower, indicating that sellers are in control for now.
Bear in mind that TSLA shares are up by 75% year-to-date, confirming plenty of upward momentum in the past few months. Recent earnings reports showed that the company is operating around breakeven but its valuation is still high as it holds a stable balance sheet.
Tesla’s gigafactory is also adding support to TSLA shares and company prospects for now, as many stock analysts believe that this sector could boom. “No other region in the country offers you the opportunity to produce batteries for the cars of the future with so much renewable energy potential,” said US Representative Raul Ruiz on Tesla’s battery factory.
Prices for lithium batteries have surged thanks to the introduction of smartphones and the search for longer battery life. Tesla is taking this to the next level by introducing batteries for cars and their output might be even more positive for TSLA shares.
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