Tesla’s share price has entered a period of extended price consolidation as sellers fail to make traction below the $600.00 level, while buyers are seemingly unable to drive the price back to the $700.00 to $900.00 price range.
Low trading volumes have dogged tesla’s stock price over recent weeks as a potential meltdown towards the $400.00 or even $300.00 level failed to materialize. This is underscored by the ATR indicator, which shows that Tesla’s daily Average True Range is now at its lowest level since October of last year.
A huge point of technical interest now is Tesla’s 200-day moving average. Much to the frustration of trend traders, Tesla’s share price has been flirting with its trend defining 200-day moving average for around six weeks now.
On the positive front, Tesla’s share price actually rallied while Wall Street fell last week, and the company’s flagship Model 3 and Y cars are being widely sold all across the as electric automobiles are now widely accepted by global consumers.
The Big Short’s Michael Burry’s huge bearish option bet towards Tesla has so far failed to materialize. Still, a big worry for Tesla is the stagnation in its share price and that the company is essentially priced for perfection.
So far no signs of imminent capitulation in Tesla’s stock price, and investors have taken the huge drop in Bitcoin this summer in their stride. Tesla still owns a huge amount of Bitcoin, so this has been a surprising reaction.
Furthermore, Tesla has said that they allow Bitcoin payment once miners reach 50 percent green energy consumption. A potential future bullish price catalyst would be if Bitcoin traded back in the $50,000 to $60,000 price range. This would certainly boost second-quarter profits and cause much-need volatility in Tesla’s share price.
Tesla Short-term Technical Analysis
According to the four-hour time frame, Tesla’s stock price has formed a bearish head and shoulders pattern with bears need to crack the $540.00 level to ignite the pattern.
Looking at the overall size of the bearish price pattern a drop towards the $300.00 level is possible if Tesla’s share price trades under the $540.00 level. Bulls need to move the price above the $780.00 level to invalidate the large bearish price pattern.
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Tesla Medium-term Technical Analysis
According to the daily time frame Tesla’s stock price has formed a bullish double-bottom pattern formation after sellers failed to breach the former key swing low from March during the May decline.
Typically, double-bottom patterns are very bullish so we could see more short-term gains in the value of Tesla’s share price.
The April swing-high, around $780.00 is the likely upside target. Now major buy signals have so far showed up on the daily time frame so far, although a break above falling trendline resistance could start a flurry of fresh buying interest.
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