Tesla Is Surging But Could Need a Recharge Soon

Shares of Tesla TSLA are driving higher Tuesday after the company reported better-than-expected delivery numbers for Q2.

Let's check out the charts and indicators to see if this advance has further to go or is bumping up against chart resistance.

In this daily bar chart of TSLA below, I can see that prices have advanced sharply from a low in late April. Prices have surged above the declining 200-day moving average line. The slope of the 50-day moving average line is now positive. The On-Balance-Volume (OBV) line moved sideways from January and only recently turned higher. The trend-following Moving Average Convergence Divergence (MACD) oscillator is back above the zero line giving us a buy signal.

In this weekly Japanese candlestick chart of TSLA below, I can see a pattern of lower highs going back to late 2022. Prices are above the declining 40-week moving average line but may only be challenging the downtrend line (not drawn) from the $410 high in October 2022. The trading volume has been shrinking since early 2023. The weekly OBV line has been rising since the beginning of 2023. The MACD oscillator has crossed to the upside from below the zero line for a cover shorts buy signal.

In this daily Point and Figure chart of TSLA below, I can see a nearby upside price target in the $235 area.

In this weekly Point and Figure chart of TSLA below, I can see a price target in the $315 area.

Bottom line strategy: Let's take a second and think about TSLA. Prices have made a good-sized rally since late April 2024. Can prices push still higher? Yes, but we are approaching overhead resistance.

Looking at the past three years of price action, I can see that reversals from up to down have been fast developments and not slow-moving reversals. 

For that reason, traders need to remain nimble as a reversal from up to down could evolve quickly.

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