Tesla (ticker: TSLA) has always been an enigma for investors. It has a habit of surprising everyone, and determining its future trajectory can be a challenge. However, a closer look at stock charts might shed some light on what lies ahead.
In the fourth quarter, Tesla reported earnings that were good, although not exceptional. While operating profit and net income reached record levels, the operating profit fell short of Street estimates. Additionally, the lower tax rate played a role in boosting net income.
Despite these mixed results, investors were pleased with the insights provided by CEO Elon Musk and CFO Zachry Kirkhorn. Musk emphasized that demand had significantly improved after the company implemented price cuts. Furthermore, Kirkhorn assured investors that profit margins would rebound over the year, following a temporary decline in the first quarter.
The positive news prompted a surge in Tesla stock, with an 11% increase during Thursday trading, closing at $160.27. In comparison, the S&P 500 rose by 1.1% and the Nasdaq Composite by 1.8%. During premarket trading on Friday, Tesla shares dipped slightly to $159.35, a decline of 0.6%.
The stock’s recent performance has been nothing short of remarkable. Since reaching its 52-week intraday low of $101.81 on January 6, Tesla shares have soared by an astounding 57%, largely due to significant price cuts in China.
This rally took many by surprise, especially given the stock’s weakness leading up to the new year. In fact, Tesla experienced a staggering 54% decline over the final three months of 2022. However, astute investors who closely followed the stock charts had an inkling that the bottom was around $100.
By examining chart patterns, technical traders gain valuable insights into investor sentiment and when they are likely to buy or sell a particular stock. In Tesla’s case, the stock found solid long-term support around $100.
In conclusion, Tesla continues to defy expectations with its unpredictable nature. While its fourth-quarter earnings were met with mixed reviews, the reassuring comments from Elon Musk and Zachry Kirkhorn have left investors optimistic about the future. Only time will tell if Tesla can maintain its upward trajectory and deliver on its promises.
Tesla Stock Faces Resistance Around $152
Shares of Tesla bounced back after reaching this level, but they have now fallen to $160. The stock’s 50-day moving average at $152 posed a risk of stalling the rally. Moving averages can either act as support or a ceiling for a stock.
The 50-day moving average also presented resistance in another way. If Tesla stock had reached around $152, it would have been up by approximately 50% from its lows, making it a tempting point to take profits based on historical patterns. This gain aligns with the largest bounces observed in Tesla stock in 2022, according to Frank Cappelleri, a technical stock market analyst and founder of CappThesis.
However, Tesla managed to surge past the 50-day moving average. The November low at $166.19 per share may now provide some resistance. Cappelleri suggests that this is a suitable level for the stock to at least pause.
On the other hand, Evercore ISI technical analyst Rick Ross anticipates further upside potential for Tesla, projecting the stock to reach around $220 per share based on his analysis. This would position the stock at its 100-day moving average, albeit with some time required to reach that level.
Katie Stockton, founder and technical stock market analyst of Fairlead Strategies, believes that $200 per share would be an ambitious target due to cloud-based resistance around $165. She, along with Cappelleri, expects Tesla stock’s gains to pause at this point.
The current outlook presents a different perspective compared to the stock chart at the end of 2022, bringing relief to Tesla bulls.
