Tesla’s stock demonstrated a positive trend in early trading on Friday, with shares advancing by 0.6% to $215.37. This increase helps the stock close out another tumultuous week on a high note. For the week leading up to Friday, Tesla’s stock has climbed approximately 7%, following a substantial 6.3% gain on Thursday alone. This recent surge was largely driven by positive data on retail sales and employment, which helped buoy investor sentiment. The stock’s performance on Thursday also marked a significant technical milestone, as it closed above its 50-day moving average for the first time in several weeks. The crossing of this moving average can often be seen as a bullish sign, suggesting that the stock may have the potential for further gains.
According to Frank Cappelleri, founder of CappThesis and a market technician, Tesla’s stock faces a key resistance point at around $220. This level is significant because it aligns with the downtrend line extending from the highs of 2021. If Tesla’s stock can surpass this resistance, it might pave the way for a rally towards $270. Cappelleri’s analysis, based on historical chart patterns, suggests that if the stock breaks through the $220 level, $270 could become the new resistance point. This potential rise to $270 represents a notable 25% increase from Tesla’s closing price on Thursday and is about $20 higher than where the stock traded before the disappointing earnings report for the second quarter, released in late July.
While Cappelleri’s insights are grounded in technical analysis, fundamentally oriented investors might place more emphasis on other factors such as the company’s EV delivery numbers and profit margins. Nevertheless, monitoring the $220 and $270 price levels could still be crucial for investors as they gauge potential future movements of the stock.
Despite the recent upward movement, Tesla’s stock remains down approximately 14% year-to-date. However, it has experienced a significant rebound of 54% from a 52-week intraday low reached in late April, just before the release of first-quarter earnings. Since the second-quarter earnings report, Tesla’s stock has displayed considerable volatility, fluctuating by more than 3% up or down in 12 of the 17 trading days. This ongoing volatility underscores the market’s sensitivity to new information and earnings results.
In summary, while Tesla’s stock has shown resilience with recent gains, it continues to exhibit substantial volatility. Investors and analysts will be closely monitoring upcoming developments, including updates on EV deliveries, financial performance, and significant events such as Tesla’s anticipated October robotaxi reveal. The combination of technical indicators and fundamental performance metrics will be crucial in shaping the stock’s trajectory in the near term.