Tesla Inc TSLA shares had a good run last week having gained over 14% to close at $244.40 on Friday. Shares of the EV maker made a whopping 45% gain in the last month and as enthusiasm over technology shares continues to persist, the stock may still see some more upside.
However, with the Federal Reserve’s policy decision outcome and inflation data release scheduled this week, it is important to understand how much uncertainty are traders factoring in. To get better clarity on supports and resistances for Tesla stock under these circumstances, here’s a look at the options market outlook:
1. Resistance: The stock managed to break above the crucial resistance level of $220 last week. Options expiring on Friday indicate the stock now sees resistance at the $250 level, given the significant open interest accumulation seen at this Call strike. If the stock manages to breach that level on the upside, a decent rally could then be expected in the near term.
2. Support: Options data shows that traders are pricing-in support at the $225 level, given the relatively higher open interest accumulation at this Put strike. With the support being factored in so far from Friday’s closing price, it becomes apparent that the market is keeping a decent headroom on the downside given the expected volatility this week.
Open interest figures only provide a fair idea about support and resistance. Any major news break or macro event could lead to significant movement in stock prices and cause a subsequent shift in open interest levels.