Tesla Motors, Inc.: This is Where TSLA Stock is Going Next

Investors like Tesla Motors, Inc. (NASDAQ:TSLA) stock because of the company’s great potential and Elon Musk’s charisma. But Tesla stock traders are also in it to make money. So it might not be a bad idea to see where TSLA stock is heading next.

Short Term: Major Resistance Levels Ahead for Tesla Stock

TSLA stock took a huge hit since touching $286.65 last July. In just over six months, Tesla shares plunged 47.4% to a 52-week low of $141.05. Now, after the company’s earnings report on February 10th and Elon Musk’s bullish guidance, the stock is trending up again. The question is: will the trend continue?

Looking at the chart below, I am a bit worried.

Chart Courtesy of www.StockCharts.com

First, let’s acknowledge that the surge after the earnings report was kind of expected. I mean, the Relative Strength Index (RSI) dipped below 30, indicating that the stock was extremely oversold. When good news came up and short sellers ran for cover, TSLA stock shot up.

But based on the stock’s past performance, the upward trend will not be smooth.

You see, there used to be strong support for Tesla stock at around $205.00, as indicated by the horizontal line. In the past 12 months, the stock tested that support five times before finally breaking below it in January 2016.

A previous level of support can change its role and become a short-term resistance level. In fact, this kind of reversal happens very frequently, even on the charts of the biggest names. So, if this is the case for Tesla stock, the $205.00 mark would become a new area of resistance. Investors should be cautious now, because the stock is less than 10% away from that level.

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