Tesla stock has been roaring, doubling off the January low. Here are the support levels to watch now.
That move follows a powerful rally off the January low. Just over a month ago, on Jan. 6, Tesla bottomed at $101.81. Since then, it has more than doubled, trading as high as $214 in today’s session.
The abrupt turnaround surely caught both bulls and bears off guard.
At one point Tesla stock was in a near-state of free fall. The shares had fallen in five straight months and suffered a 67.6% decline from the August high to the January low. From the all-time high, the stock was down more than 75%.
While investors sent the shares lower despite record fourth-quarter deliveries reported in early January, the stock eventually found its footing and turned higher a few days later.
A solid earnings report later in the month helped give the stock a little extra oomph as well.
Currently working on its fifth straight weekly gain, Tesla stock has been the strongest U.S. stock with a market cap of at least $500 billion. Nvidia (NVDA) – Get Free Report has done well, too, but not nearly this well.
Trading Tesla Stock
With Thursday’s rally, Tesla stock is working on its eighth straight daily move up and its 14th daily gain in the past 15 sessions. Also with today’s rally the stock reclaimed 50% of the August to January decline — the decline that sent it lower by more than 67%.
For active traders, the situation is starting to feel a bit extended here.
If Tesla stock can continue higher, the 200-day moving average and the 61.8% retracement are the next measures in play, near $225 and $233, respectively.
For traders carrying a long position, they are likely lightening up today and may consider lightening even more if we see a push to the next area.
On the downside, keep a close eye on the 50% retracement at $208.25 and today’s low, currently near $205.50.
A break of these levels and a move back below $200 opens up a potential move down to the 10-day moving average, which hasn’t been tested in several weeks.
Traders will expect this measure to act as support for Tesla. But if the prevailing market trends are bearish, it may not hold up.
Below the 10-day and the $175 to $180 area is in play, which was temporary resistance amid this rally. Bulls would like to see that level buoy Tesla stock, should it fall there. A decline to that level may align with a test of the 21-day moving average as well, giving buyers an extra technical catalyst should that setup develop.
In any regard, Tesla stock remains firmly in the “buy the dip” camp until the trend breaks down.