Technical Update - Tesla close to testing key resistance. Can it break it ?
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Tesla bounced strongly over the (Northern Hemisphere) summer to the 0.618 retracement of the April-May sell-off and is set to test strong resistance area at 314.50-316.50 within next few days. A close above 316.50 will confirm the uptrend and is likely to send Tesla towards to the 1.618 projection of the August-September correction at 344.90 and the 0.786 retracement at 346.32 of the April-May sell off.
RSI above 60 showing positive sentiment but there is currently divergence indicating an imbalance in the market is supporting this scenario. Usually, it indicates that a trend is weaking. However, RSI has broken above its falling trendline so if Tesla share price closes above its resistance area the RSI divergence is likely to be traded out i.e., cancelled.
A close above the resistance is also likely to widen the Bollinger bands supporting the uptrend.
Rising trading volume over the past two weeks supports the uptrend.
If Tesla is rejected at the resistance and closes back below 290.40 it could drop to test its lower rising and the 55 SMA. A break below the support at 265.74 will be tested.
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