Stock of the day: Tesla
22 August 2023
Tesla's Monday performance was a head-turner for investors, analysts, and enthusiasts alike. It wasn't merely about the 7% rise, which by itself is commendable. The true story lies beneath, in the intricate patterns that the stock has been painting over time. At the end of last week, keen observers would've taken note of Tesla's rendezvous with the lower line of its channel-up formation. This is depicted on the stock's chart with defining black lines.
Friday served as a prologue to the saga, as the stock price flirted with this significant support, ultimately choosing to rebound. And the first trading day of this week made sure that investors knew this wasn't a fleeting flirtation. Monday didn't just have Tesla opening with a bullish gap, but it maintained an upward trajectory for the entire trading session. Aided by a higher opening, the stock showcased bullish dominance that was hard to miss. By the time the markets closed, Tesla was comfortably nestled close to the daily highs.
Such vehement buying pressure and the consequent bounce off are generally considered strong indicators of a stock's resilience and, in this context, signal a potent mid-term buying opportunity. While Tesla aficionados would be itching to see the price surpass the $240 resistance level (which the chart designates with a shade of green), the recent movement has already set a tone of optimism.
Indeed, any breakout above this resistance would be a feather in the cap and would further solidify the stock's bullish stance. However, it's essential to remember that the core of the bullish sentiment is rooted in the channel-up formation. As long as Tesla's stock price remains above the lower black line, indicating its commitment to staying within the channel, it's safe to say that the electric vehicle titan has regained its positive sentiment in the market.