Key Pivot Established at Higher Swing Low
Tesla, Inc. (TSLA) stock has been rising since a higher swing low at $214.25 was established in April last year. This was a key pivot as prior trend resistance represented by a downtrend line was confirmed as support. Moreover, a 78.6% Fibonacci retracement was completed as well. It is interesting to note that the bottom wasn’t established until the day that the downtrend line crossed the retracement line. That low completed a bearish correction that began following a failed new high breakout to $488.54 in December 2024.
Minor Record High Triggers Pullback
Recently, the shares of TSLA reached a minor new record high of $498.83, exceeding the prior high briefly before closing below the December 2024 low and leading to the current pullback. Subsequently, the 20-week average, now at $436.54, failed as support this week but was quickly recovered. A failed breakdown of the 20-week average suggests a higher swing low may have been established, putting an end to the pullback.
Weekly Closes Will Confirm Bullish Strength
Bullish implications of the failed breakdown will confirm with a weekly closing in the top third of the week’s range, which is currently $417.44 to $449.50. Also, a recovery of the 10-week average with a weekly closing above $446.15 further shows strength. An inside week was established last week and the high of period at $454.30, the next key pivot. A breakout above that high will further show buyers in charge and give credibility to the weekly breakout.
Short-Term Pattern Targets Initial Upside
Extending the short-term pattern of higher swing highs and lows shows an initial upside target at $535.92. An ABCD pattern on the chart marks the moves. Further up is the confluence of two targets. A larger measured move points to $564.00 and the smaller ABCD pattern on the chart shows the 127.2% projected target at $568.14.
Potential for Long-Term Bull Trend Continuation
TSLA stock is in a position to eventually break out of a long-term base with a high of $498.83. The current pullback low could therefore be the last low before the next breakout attempt. Once successful, the stock of TSLA could move into a new phase of its long-term bull trend in a powerful continuation move.
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