Tesla (TSLA) Stock Price and Forecast: Is this a dead cat bounce?

Tesla stock rallies over 3% on Friday to $923.
TSLA is still stuck in a downtrend for 2022.
Tesla shares need to break above $945 to get some upside momentum.

Ivan Brian FXStreet

Tesla (TSLA) rallied well on Friday to end the week solidly after some volatile swings. Meme stocks took a battering, and high growth names did not fare much better. Overall, it was a wild ride for the markets with hawkish moves from all the main central banks sending yields sharply higher. This sent growth stocks lower, but it was not just growth stocks. Facebook suffered the largest market cap loss in history following its earnings report, only for Amazon to do the exact opposite and have the greatest market cap gain in history after announcing positive results. Tesla, meanwhile, went along under the limelight, a first for the stock.

Tesla Stock News

The competition is steadily increasing in the electric vehicle space as it goes mainstream. Reports over the weekend suggest General Motors (GM) is pumping $6.6 billion into its Michigan EV plant to scale up production. Tesla has had the EV field to itself for many years, but now all of a sudden it is getting increasingly crowded. Bank of America recently noted that Tesla's market share could fall from over 60% to under 20% of the EV sector in the next three years. Electrek also reports that Volvo and Northvolt have poached Tesla's head of Gigfactory Berlin to lead their own factory in Sweden.

Tesla Stock Forecast

Tesla has so far bounced perfectly from the 200-day moving average. This is a key level, so expect some fighting between bulls and bears around here. For now it has held, but it remains a key support at $819. There is a small resistance at $845, which is the short-term pivot in our view. Overall, a classic downtrend remains in place: lower highs since December and now lower lows from last week at the 200-day moving average.

Tesla (TSLA) chart, daily

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Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

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