Tesla stock is not for the faint of heart. On any given day, stocks could rise or fall based on something their mercurial CEO, Elon Musk, says or does.
Most of them were willing to accept this trade-off when Tesla shares soared. However, last year’s disappointing returns likely tested shareholders’ resolve. Those who held their shares took it on the chin in 2022, but Tesla shares have been rallying recently and the gains have been strong enough for the shares to do something they haven’t done eight months ago.
Tesla: Boom Luxet shares
Tesla stock has been one of the biggest beneficiaries of the easy money policies put in place during the Covid pandemic. Between its low in March 2000 and its high in November 2021, Tesla stock gained a staggering 1,674%, drawing in legions of Elon Musk fans. But not everyone was convinced. The surge in Tesla shares has pushed its valuation to notable heights, causing many to wonder if the rally is a bubble destined to burst.
Those doubters have been rewarded in 2022. After its meteoric rise, Tesla shares fell 75% from their peak to their lowest level in January 2023. This crash likely emboldened many who were betting against Elon Musk by shorting Tesla shares. However, there has been nothing but good news for short sellers since then, given that Tesla nearly doubled by mid-February.
Recently, Tesla stock has settled in a trading range between $152 and $218, choppy in search of conviction.
Tesla stock is regaining a key level
Sideways trading in Tesla shares indicates that the bulls and bears have been grappling for control. Without a clear direction, many investors will likely remain on the sidelines, waiting to see who will come out on top.
Last week, the stock may have taken a step towards declaring a winner, closing above the 200-day moving average (DMA) for the first time since September on heavy volume.
Daily trading volume has been above average since last Wednesday, suggesting some investors may be staying away from the sidelines. It could also indicate that Tesla shares are short-term buys to cover positions to protect against additional losses. according to Nasdaq dataMore than 95 million Tesla shares were suspended in mid-May.
It is no coincidence that the increase in daily volume coincided with the stock’s recovery of the 200-DMA.
The 200-DMA is considered by many to be a key measure of long-term sentiment, using it as a line in the sand for decision making. They buy when stock prices trade above it and sell when stock prices trade below it.
Forget Tesla—we’re all into this EV stock
What’s next for Tesla stock?
It’s optimistic that the company’s share price is above the 200-DMA, but the stock hasn’t completely panned out. It is still trading within the sideways range, so investors will want to watch if it closes above $218. If so, higher price targets may be in the works.
I can claim some resistance lines above, including a nice round target around $250. in May, real money“Bruce Kamish, who has been analyzing price charts for nearly 50 years, I calculated a price target of $245 For Tesla using daily graphs in points and figures. He said a close above $208 in April could put a The long-term point-and-figure chart target is $443 in play.
Of course, we’re not likely to see that long-term goal anytime soon. Stocks don’t go up or down in a straight line, so a little bit of a digest in stocks in the short term wouldn’t be surprising. If that is the case, then a test and sustain of the 200-DMA could provide a catalyst towards the $240-$250 level, so that’s what I’ve been looking for from here.
