Tesla Stock Bounces Higher: Is The EV Maker Revving For A Breakout?

Tesla Inc. TSLA shares are trading higher Monday alongside other EV companies as the Russia-Ukraine conflict is causing European countries which depend on Russian oil to look to other places for their energy. The stock made a bounce off support a couple of days ago, has seen a strong bullish push since, and is now heading toward resistance.

Tesla was up 7.48% to $870.43 at the close on Monday.

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Tesla Daily Chart Analysis

• Shares are trading in a descending channel pattern, also known as a bullish flag pattern. The stock saw a strong bounce off the support trendline of the channel and has been heading higher since. If Tesla continues on this pace, it may see a breakout and a strong bullish push over the next few weeks.
• The stock trades below the 50-day moving average (green) but above the 200-day moving average (blue). This indicates Tesla is going through a period of consolidation. The 50-day moving average may act as resistance, while the 200-day moving average may hold as support.
• The Relative Strength Index (RSI) has been pushing higher the past few days and now sits at 46. This shows that more buyers have been moving into the stock the past few days, although there still remains a slight surplus in the selling pressure overall.

What’s Next For Tesla?

Tesla has seen a few days of bullish movement in a downward channel, and if it is able to continue, the stock could see a breakout. A breakout would cause a longer period of bullish movement to happen, and the stock could see new highs if it is able to break out and hold above the resistance in the pattern.

Bullish traders want to see the stock continue to form higher lows and break out of the pattern, which may cause a further bullish move to happen.

Bearish traders are looking to see the price be unable to cross above the resistance level and start falling lower. A break below the support level could cause the stock to begin a strong downward trend and a bearish market may ensue.