After a couple of months’ worth of rallies, Tesla shares have pulled back in the first half of July to an area of interest visible on the daily time frame. Price peaked at $240/share in the past few months then retreated to the $220/share levels in the past few days.
MACD is pointing down, indicating that sellers are in control of price action for now. A bounce from this area could lead to a test of the former highs at $240/share or perhaps allow Tesla shares to create new ones.
A deeper correction could lead to a test of the $200/share level, which is also an area of interest for Tesla shares.
Tesla Shares Outlook
RSI is on middle ground, indicating that neither buyers or sellers are in strong control of price action for now. An upside break from the short-term consolidation could be a signal for more gains while a downside break from the sideways pattern could show that more losses are in the cards for Tesla shares.
The next support area is located at the $190/share mark, which lines up with the 200 simple moving average. At the moment, the 50 simple moving average could also hold up as near-term support for Tesla shares.
Latest news from the company shows that Tesla is looking to halt the production of Model S to pave the way for production of a new SUV in its California plant. Simon Sproule, a spokesperson for Tesla Motors, said that the goal is to boost production by 25% when vehicle assembly resumes on August 4th. Tesla will be modifying the factory’s body and general assembly line, which will cost about $100 million. The modification will allow Tesla Motors to build the Model X crossover SUV on the same line as the Model S sedan.
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