Key Takeaways
- Tesla shares surged 27% last week, boosted by a better-than-expected second-quarter deliveries report and building anticipation ahead of the company’s Robotaxi Day next month.
- Last week, Tesla shares closed above both the 50- and 200-week moving averages and a prominent 12-month downtrend line on the highest trading volume since mid-February, indicating buying conviction among market participants.
- Tesla shares may encounter resistance on the weekly chart at $299.29, $384.29, and $414.50, while potentially finding support around $205.
Tesla (TSLA) remains in the spotlight after a 27% surge in the EV maker’s share price last week drove the stock back into the green for the year. The rally followed a better-than-expected second-quarter deliveries report on Tuesday and building anticipation ahead of the company’s Robotaxi Day next month.
Amid the strong recent price momentum, we use technical analysis to identify key areas on Tesla’s weekly chart to watch out for.
Breakout Above Key Chart Indicators
Tesla shares have been tracking higher since the completion of a piercing pattern in late April. Typically, technical analysts interpret this two-bar candlestick formation as signaling a potential reversal from a downward trend to an upward trend.
Last week, the stock closed above both the 50- and 200-week moving averages and a prominent 12-month downtrend line on the highest trading volume since mid-February, indicating buying conviction among market participants. Moreover, the relative strength index (RSI) nears overbought territory, confirming the strong recent price momentum.
Levels to Watch Amid Further Upside
If the stock continues to climb higher, investors should focus on three key chart levels.
Firstly, it’s worth watching how the price responds to last year’s high at $299.29, an area that also sits in close proximity to two prior price peaks that formed in August and September 2022.
A close above this region could see Tesla shares move up to the next important resistance level at $384.29, where they may encounter selling pressure near the April 2022 swing high. Interestingly, this area also roughly aligns with a bars pattern of the stock’s January to July 2023 uptrend applied to the April swing low.
Upon a breakout above this level, the stock could make an attempt at setting a new all-time high (ATH) above its current record high at $414.50 minted in November 2021.
Monitor This Key Area During Retracements
Given the stock trades near overbought conditions, it’s also worth identifying where it may find support during a pullback.
A retracement would likely find buying interest around $205, an area on the chart where a horizontal line connects a series of peaks and troughs dating back to February last year. This trendline also forms the neckline of an inverse head and shoulders pattern on the daily chart.
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As of the date this article was written, the author does not own any of the above securities.