Tesla stock analysis: will the stock zoom higher?

Tesla could break out of the tight range and rally to $780

Tesla (NASDAQ: TSLA) reported stellar second-quarter earnings on 26 July. The company’s revenue of $11.96bn beat expectations of $11.30bn, according to Refinitiv. Sales of regulatory credits of $354m were the lowest compared with the previous four quarters.

The automaker surpassed $1bn in earnings, reporting a net income of $1.14bn in (GAAP) for the quarter. This figure is more than ten times the net income of $104m earned in the year-ago quarter and more than double the $438m reported in the first quarter of this year.

Speaking to CNN Business, Tesla CEO Elon Musk acknowledged the global chip shortage was hampering all automakers. He said: “For the rest of this year, our growth rates will be determined by the slowest part in our supply chain.”

Tesla said it was on track to complete construction of factories near Austin, Texas and in Berlin, where it expects to start limited production of the Model Y SUV later in the year. In addition to chips, the company said that cells used to make large batteries, used in both the Cybertruck and semi-tractor truck, were also in shortage. The company anticipates “volume production” of the Cybertruck in 2022.

Tesla has been an underperformer this year but could it pick up momentum following strong results? Will the Tesla stock go up? Read TSLA stock analysis to find out.

Tesla share price technical analysis: weekly chart

Tesla share price weekly chartThe Tesla stock price witnessed a correction in February and since then it has been consolidating in a large range between $537.83 and $783.53. This is a positive sign because it shows that bulls are in no hurry to dump their positions.

The 20-week exponential moving average (EMA) has flattened out and the relative strength index (RSI) has been hovering near the 50 mark, signalling a balance between supply and demand in the short term. But the rising 50-week simple moving average (SMA) suggests the medium-term trend favours the bulls.

If buyers drive the price above $700, the momentum could pick up and the bulls will attempt to challenge the next resistance at $783.53. This level may act as a stiff resistance and if the price turns down from it, the consolidation may continue for a few more weeks.

However, if bulls drive the price above $783.53, the stock could surge to the all-time high at $897.68. The bears will have to sink the stock below $537.83 to signal a possible change in trend.

Tesla share price technical analysis: daily chart

Tesla share price daily chartThe Tesla stock price has been trading in a tight range between $697.48 and $618.32 for the past few days. This suggests indecision among the bulls and the bears about the next directional move.

The moving averages have been criss crossing each other, indicating a state of equilibrium. The first sign of strength will be a breakout and close above this tight range.

If bulls manage to do that, the stock could start its journey toward the overhead resistance at $783.53. If the price turns down from this resistance but bulls arrest the subsequent decline at $697.48, it will increase the possibility of a breakout of $783.53.

Contrary to this assumption, if the price turns down from the current level or from $697.48 and plummets below $618.32, it will indicate an advantage to the bears. If bears pull the price below $537.83, a new downtrend could begin.

Tesla: stock buy or sell at these levels

The Tesla share price analysis suggests the stock has been trading inside a large range for the past few months. Usually, in a range, the best time to buy is on a rebound off the support and book profits near the resistance. Another possible option is to wait for the price to break above the range before initiating fresh positions.

Trade Tesla stock: Tesla share price

Tesla Inc
Daily change
Low: 1003.5
High: 1086

Further reading: ESG momentum drives Tesla to record Q2 figures

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