Tesla, Inc TSLA was rebounding on Friday, as part of a two-day recovery after the stock was downgraded Wednesday by Jefferies analyst Philippe Houchois, who also lowered the price target from $230 to $185.
The pop higher was taking place on lower-than-average volume, which suggests Tesla may be experiencing a relief bounce because the bulls aren’t showing strength.
If Tesla continues to bounce higher on Monday, bullish traders will want to see the stock regain the eight-day exponential moving average (EMA), which could propel the stock up to fill an upper gap that exists between $169.70 and $177.65.
If Tesla fills the gap, bearish traders can watch for the stock to print a possible bearish reversal candlestick, such as a doji or shooting star candlestick, at the top of the empty range. If that happens, the local top may be in and Tesla is likely to retrace lower.
Bullish traders may choose to wait to see if Tesla retraces lower on Monday and forms a bullish reversal candlestick above the most recent low of $152.37, which could indicate the downtrend is over and an uptrend is in the cards.
Tesla has resistance above at $166.71 and $177.59 and support below at $152.19 and $139.53.
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