TSLA Stock Price and Forecast: Why is Tesla up again?

Tesla stock adds another 5% on Wednesday.
TSLA shares break above the 9 and 21-day moving averages.
Tesla stops just at the $1,120 resistance level.

Ivan Brian FXStreet

Tesla strongly outperformed on Wednesday. Not just the broad market with the Nasdaq and S&P finishing in the red, but Tesla also outperformed some notable electric vehicle names that have all been well bid of late. Rivian (RIVN) finally had a down day, and it was a tumultuous one, with the new kid on the EV block closing down 15%. Lucid Motors (LCID) fell over 5%, but Tesla held firm and closed in the green.

Tesla graph, 15-minute

Tesla (TSLA) stock news

Rivian (RIVN) finally gave up some gains yesterday, but Tesla (TSLA) powered on. This is despite more sales from CEO Elon Musk filtering through newswires. It should also be noted that in his Twitter poll Elon Musk proposed selling about 10% of his stake. If Elon holds that promise, then he is only halfway through selling with plenty more to come. Despite one fairly strong move lower so far, Elon Musk's selling has not had too detrimental an effect on Tesla's share price. This could be to do with the clever way he structured the proposal on Twitter.

Tesla (TSLA) stock forecast

Now we are not here to drone on about the fundamental picture. While most EV stocks are hugely overvalued in our opinion, momentum is too strong to ignore. Tesla remains bid after yesterday's somewhat surprising move. The stock did perform technically quite well, stalling at the $1,120 resistance, but the move did break both the 9 and 21-day moving average and thus putting Tesla back on track for more gains.

The chart only appears bullish once TSLA price is above $1,120. However, Tesla is now in a strong range between $1,000 and $1,120. The stochastic indicator did give a crossover buy signal this week, but that has not been confirmed by anything else, so we are holding tight for now.

We are all by now aware of the stretched valuation for the electric vehicle space and the options frenzy driving many of the names. Tesla has been at the forefront of this frenzy, and options volumes are coming down, which may indicate a turnaround. For now though, the two key pivot levels are $1,000 and $1,120. Breaking lower will then bring $910 as the target, breaking $1,120 opens the door for more all-time highs.

TSLA 1-day chart

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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