Tesla has been trading in a narrowing range since an ugly post earnings breakdown back in late July. The July 25th flush followed a powerful rebound off major support near the $180.00 area. Of late TSLA has been outperforming the market while working on its third straight higher low. Is a new rally leg on the way?
TSLA is trading near the upper band of its post earnings range. A close above $244.70 would put the stock at new October highs. Once this level is cleared TSLA will have a clear shot at major resistance near $258.00. This key zone is marked by the declining 200 day moving average as well as the very damaging July 25th breakdown gap.
At current levels we regard TSLA as a fairly low risk buy. A close back below $244.00 would violate last week’s low sending a clear warning sign that the declining 200D is still in control.
TSLA is due to report earnings on Oct. 23rd.
TSLA sports a short interest ratio of 5.4.
We do not have a position in TSLA at this time.