Tesla is the only electric automaker, which has crossed the $600 billion valuation. The future of Tesla is akin to many factors related to sustainable energy, which makes Tesla a positive stock for the foreseeable future.

Technically, we need to analyze the stock based on higher time frames.

- Market structure: Market structure has formed bullish after the break of the resistance earlier at $635. As Tesla is making a corrective move, $600 support level is a strong one from which possible long positions would come in play.

- Trendline: Tesla has broken the 7-month descending trendline for a breakout buy. After the breakout, market usually takes a breather by correcting its impulse move. Currently, it’s also retesting the broken trendline. An ascending trendline is also in the formation, which might be broken for the market to test the mentioned support level. But since, larger time period of the break is captured by the descending trendline, we will consider the descending trendline break as a minor one.

- Retracement: The golden area retracement of 75-78.6% is in confluence with the swing support level at the $600, giving a high probability trade.

-EMA's: EMA 50 is range bound, whereas EMA 200 has been tested twice to the upside. Currently, market is testing the EMA 50. Since the EMA 50 is range bound, Tesla kept on breaking the EMA to both the directions. Therefore, no clear direction on the EMA except for the EMA 200, which will be tested after we tap the support level.

- RSI/CCI: The trendline of RSI has been tested and is vulnerable to a break. On the other hand, CCI has already broken the descending trendline, which denotes a further move up, towards the over-bought region.

Tesla is a valuable stock to be kept for long term. Once the technology advances on the Tesla battery lithium recreation, the stock may go parabolic. Long term targets are set at $1000 and $1200 respectively.

Tesla to rebound from $600

Jul 16 2021