No Signs of a Sustained Rally for Tesla
The electric vehicle company has plenty of supporters, detractors and distractions, but there's nothing in the charts to recommend buying.
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Let's check out the charts and indicators of EV maker Tesla TSLA as the media gets preoccupied with Elon Musk's pay package, EV tariffs and self-driving taxis and other factors that are hard to quantify.
In this daily bar chart of TSLA below, I can see that prices have worked lower over the past 12 months. Prices trade around the bottoming 50-day moving average line but below the declining 200-day moving average line. Trading volume has been declining since December and suggests that investor interest is fading. The On-Balance-Volume (OBV) line shows a clear path of weakness since the end of December. Sellers of TSLA have been more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is hugging the zero line telling us there is little in the way of trend strength.
In this weekly Japanese candlestick chart of TSLA below, I can see a longer pattern of lower highs. Over the past three years, TSLA has declined from around $400 to touch $100 in early 2023 and made a higher low in the $140 area in April. Weekly trading volume has declined since early 2023. The weekly OBV line has generally moved higher since early 2023. The MACD oscillator is below the zero line but crossing to a cover shorts buy signal.
In this daily Point and Figure chart of TSLA below, I can see that the software is projecting a downside price target in the $153 area. A trade at $188 should turn this chart more positive.
In this weekly Point and Figure chart of TSLA below, I can see the same $153 downside price target as shown on the daily chart above.
Bottom line strategy: TSLA has been and is likely to remain one of the most closely-followed companies in the world. The company has many long-term bulls, many critics and plenty of competition. Prices could make a burst to the upside at any time but without signs of accumulation (buying), I do not currently see a sustained rally getting underway in the near-term.
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