Tesla share prices have been on a strong climb for the past couple of months, yet it seems that the rally is exhausted. Price has found difficulty breaking past the $240/share mark and has made a downside break from the short-term consolidation, indicating that a retracement or reversal might take place.
MACD hasn’t quite reached the overbought zone but it appears to be crossing down, also reflecting a return of selling pressure for Tesla share prices. For now, the price is still moving above the 50 SMA (simple moving average), confirming that the uptrend is still intact. However, this dynamic inflection point might be the next support area should Tesla share prices make a retracement.
Tesla Share Prices Forecast
A possible retracement could last until the $210/share mark, which is in line with the 50 SMA and an area of interest, as seen on past price action from late March to early May this year. If this holds as support, Tesla share prices could bounce up to the previous highs at $240/share or even go for this year’s record highs at $250/share, depending on buying pressure.
On the other hand a continued selloff might last all the way down to the next potential support zone at the 200 SMA, which has held as a dynamic support level for the pair in the past few months, while uptrend corrections were made. This is around the $187-$190.00 per share mark for now.
A break below this strong long-term support area could mean the start of a prolonged downtrend for Tesla share prices, as price may form a double top pattern and confirm the breakdown. Take note that the formation is roughly 70 points high, which suggests that the resulting breakdown could be of the same size.
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