Tesla Within a Wedge Within a Range

by Darius Anucauskas
13:31, 2019/03/26

The Tesla stock (NASDAQ: TSLA) has been on a gradual slide since peaking in mid-December. From the technical side, we can see that the share price had moved back to its October lows again. Also, it’s worth mentioning that TSLA’s trading activity has been maintained within the boundaries of a very wide range between roughly the 390-dollar price tag on the upside and the 245-dollar mark on the downside. This wide range has been in play since the beginning of 2017 and continues to stay intact. From a more medium-term perspective, we notice that the share price is moving inside a falling wedge formation, which according to text books, has a tendency to break to the upside. But in order to get comfortable with that idea, we would like to see a break of the upper side of the wedge first and only then aim higher.

The stock has hit the lower side of the above-mentioned wedge formation, so there might be a chance to see a correction back up in the short run. If the price pushes above the 262.50 area again, it could make its way to the 274.20 hurdle, which is near the high of March 21^st and at the low of March 7^th. A further acceleration of the price may lift the stock to the 283.63 obstacle, which is the high of March 15^th and near the upper side of the wedge. If investors decide to maintain the price action within the boundaries of the formation, we may see another slide back down, potentially aiming for the lower bound of the previously-mentioned wide long-term range.

On the other hand, if the upper side of wedge breaks and the stock climbs above the 295.19 barrier, this might interest more investors again, as there could be a good chance for TSLA to get back to its February levels. We will then examine the 305.60 obstacle, as the next potential resistance area, a break of which could lead the share price to the 320.00 mark, which is the high of February 28^th.

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