- Tesla stock closes up 1%, but the S&P 500 drops 1.3%.
- (TSLA) shares rally and aim for $667 resistance.
- Tesla at a strong support region with 200-day moving average.
Tesla stock outperformed on Friday in a strong session with most of the volume skewed toward the higher end of Friday’s range. While the broader market suffered its second day of post-Fed rate talk blues, Tesla has put in two solid days that have seen its stock price move from $593 to $623 since Wednesday. $667 remains the short-term pivot, and momentum is now favouring a move to test this level.
Market Cap: $600 billion
price/Cash Flow: 87
Enterprise Value: $596 billion
Total revenue: $35.94 billion
Tesla stock forecast
The recent attempts to take out the $539 low failed and set Tesla stock on an upward trajectory since the middle of May. This was just as well given the vacuum of volume below $539. A break of that level and the move likely accelerates to sub-$500 pretty quickly and the bear target zone. This would be a nice spot to try some fresh longs if it were to trade down there. For now, all is rosy in the garden of Tesla stock with $667 being the short-term pivot that Tesla bulls are aiming to take. This will clearly end the series of lower highs and set up a push higher. Above $715 things could accelerate again due to the lack of volume above this level.
For now, the risk-reward favours trading from the long side, but it is not yet strong enough in this author’s opinion for new positions. The momentum oscillators – Relative Strength and Commodity Channel Index (RSI and CCI) – are trending higher with price. The short-term moving averages – in this case 9 and 21-day – are flatlining, but the Tesla stock price is just trading above them. Waiting for a break of $667 or $539 will have a stronger risk-reward.
Breaking either $539 or $667 will be strong moves and should see the Tesla stock price accelerate, so an option strategy could work well in this instance. Buying a $670/$530 strangle could work well. A strangle is an options strategy in which a trader buys an out-of-the-money call and buys an out-of-the money put to benefit from a bullish or bearish breakout.