- Tesla stock pops again on Monday despite some Chinese virtual software recall.
- TSLA still set for further gains after wedge breakout.
- $715 is the next resistance as TSLA stock heads higher.
Update after market close: Another day of solid gains as Tesla recovers all of the lost ground from Friday and then some. Eventually closing at $688.72 for a solid 2.5% gain. Thursdays high still has not been recovered though so that will be an early target for Tuesday. The good news is the reaction of Tesla stock to potential bad news as in the virtual software recall story that broke from China. Bears had been pouncing on the news but it had no traction.
Update: Tesla remains on course for $715 resistance as the stock reacts positively despite some potentially negative news from China. A virtual software recall on up to 300,000 vehicles is not hurting positive sentiment to TSLA stock as it moves ahead by 2% in the first half hour on Monday. $715 is the next big resistance and a break here could see the price accelerate sharply.
Tesla shares gave up some recent ground on Friday as the stock closed just over 1% lower. But the shares still registered some impressive gains earlier in the week, so Friday's setback is only a minor one. The stock powered through some key levels on Wednesday and Thursday in a perfect technical setup. On Friday the stock held its ground with an inside candle. An inside candle is one where the daily high and low do not exceed the previous day's high and low, so the candle range is inside the previous one. An inside candle is often a feature of a breakout where the stock consolidates before pushing higher again. $635 had been a key level we had identified here at FXStreet as the volume profile was thin above this price. All this should have resulted in a price acceleration and this played out perfectly as Tesla stock powered through the level. $667 was the next resistance and this corresponded with the wedge formation Tesla stock has been in since record highs from January. Tesla again did not disappoint and charged through the level. Friday then, as mentioned, saw a consolidation inside candle with a modest 1.2% loss to close the week at $671.87, up nearly $50 on the week. Not too shabby!
Tesla key statistics
|Average Wall Street Rating and Price Target
Tesla stock forecast
The Weeknd might be a good artist, but this weekend was not too kind to Tesla stock with some negative data coming out of China. News that Tesla is recalling up to 300,000 Chinese-made and imported Model 3 and Model Y cars hit the tape on Saturday. Chinese regulators said the move is linked to assisted driving, which drivers can activate accidentally. The recall is for software and is remote, according to Reuters, so may not be as big an issue as the headlines would lead one to believe. Certainly, Monday's premarket action is limited with Tesla stock little changed at $668.60 as of 0530 EST/0930 GMT.
All this keeps the technical picture strongly bullish and a test of the next big resistance at $715 firmly on track. Above here the volume shelf or profile drops off quite a lot. On the right of the chart below, we can see red and green bars signaling the volume at each price point and how thin it gets above $715. This should lead to a price acceleration just like we saw on the break of $635. There is a gap to $657 between Wednesday and Thursday's open, and the market does love to fill a gap. This $657 is holding the short-term bullish trend along with the 9-day moving average close by.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.