Amid a fresh record rally in Wall Street indices, Tesla Inc. gained further momentum and extended the previous week’s upsurge, starting out a new week, as well as, a month with a bang. Speculations surrounding the Hertz purchase of Tesla for its fleet powered the record run in shares of the Electric Vehicle (EV) company.

Looking ahead, it remains to be seen if Tesla stock price continues its bullish momentum, especially after the company’s founder Elon Musk watered down the speculations by tweeting out, “If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet. Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers. Hertz deal has zero effect on our economics.” The latest explosion in the price was in large part caused by the news that Hertz is ordering 100,000 Teslas. Then Hertz and Uber combined with Hertz saying it could offer 150,000 Teslas to Uber over the next three years. This news was enough to set Tesla into lift-off, and the price move even surprised Elon Musk, who said he was surprised this news moved the stock as demand is not a problem for Tesla. Rather production is.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Whatever your valuation view on the stock, the chart does not lie, and we have to urge some caution now after this rally. The Relative Strength Index (RSI) has not been this overbought for some time and is at an extremely high 92. The Moving Average Convergence Divergence (MACD) is also looking extremely stretched. Tesla has stretched massively from the short-term 9-day moving average. While the trend is strong and clearly bullish, we are calling for a correction and a move back to $1,000 in the short term.

Support is at the $1,000 round number and the 9-day moving average. Below that, support at $950 is the breakout. Below $950 Tesla is back in neutral.

TESLA reaching for 200% Fibo

Nov 02 2021