The Tesla stock price is once again breaking out to the upside. However, this time TSLA should stay on track for $800, and potentially even higher.
Tesla (NASDAQ: TSLA) finished the day at $685.70, with an impressive. gain of $28.75 (4.38%)
Elon Musk’s testimony in defense of Tesla’s 2016 purchase of Solar city did little to put off the buyers yesterday. Tesla stock outpaced the majority of shares on the NASDAQ and if the technical outlook is anything to go by, may continue to do so for a while to come.
Furthermore, CNBC’s Mad Money host, Jim Cramer has given the EV maker his latest ringing endorsement. Appearing on TheStreet Live, he told interviewer jeff Marks’ that:
“Tesla is a huge buy right here”
Cramer is not the only outspoken bull in the TSLA camp. TradingAnalysis.com founder Todd Gordon predicts Tesla’s head start on its rivals will lead to domination of the hotly-contested Electric Vehicle market.
“if you look at the billions of miles driven that Tesla has plugged into their major data centers compared to what the other EVs have, it’s not even funny,”
“The one who has the most data will ultimately be victorious. So, sure, they can gain some short-term market share, but I think longer term, … I think the market is already voting who the winner will be.”
It seems the market agrees, the Tesla stock price has not only reversed from last week’s weakness but broken out to the upside. All that’s left is for TSLA to punch through $685 and the road to $800 and higher is clear of traffic.
The daily chart shows TSLA has respected a strong uptrend in place from the March 2020 low. Additionally, a downtrend from Januarys $900.40 high has countered the uptrend for the last 6 months.
However, TSLA has again broken above the descending trend line for the second time in three weeks.
The first clearance came on the 24th of June but the Tesla stock price was unable to proceed beyond $695. This resulted in TSLA retracing arund 12% to $620 in the aftermath of the failed breakout.
However, this time around, TSLA appears to have enough traction to convincingly penetrate $695, which should lead to en extension to the April $780.79 high. In my opinion, Tesla will exceeded this target by some margin and I predict we will looking at a return to the ATH some time soon.
However, timing is everything and considering the stock’s high volatility, buyers should place a stop below the long term uptrend at $602.
Should TSLA lose this support level, it would indicate the price may retreat to $550, offering long-term investors a favourable entry point.