Tesla Motors (NASDAQ: TSLA) has been navigating a turbulent 2024, facing several significant challenges.
Despite a strong recovery in the second and early third quarters, the company is grappling with a slowdown in demand, delays in its product roadmap, and persistent quality control issues.
These problems, coupled with regulatory scrutiny over Tesla’s Autopilot system and a large-scale vehicle recall in China, have created what some are calling an “EV winter,” shaking investor confidence and raising concerns about Tesla’s ability to maintain its stock performance.Notably, “EV” refers to the electric vehicle sector.
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Nevertheless, Tesla has shown notable bullish momentum since July 2024. According to trading expert Tradingshot, the stock recently broke out above a critical all-time high (ATH) lower highs trend-line.
The breakout signifies a crucial shift in Tesla’s long-term trend, establishing a new bullish pattern within a “Channel Up” formation on the weekly chart. This pattern suggests a significant upside potential, with a clear path toward a $380 price target within the next two months.
Recent market correction and strong price recovery
Over the last three weeks, Tesla’s stock has experienced a pullback, mirroring a broader market correction.
Tesla stock price analysis chart. Source: TradingView
However, the green weekly candle formed last week is a key indicator that the stock may have found its bottom. This recent low represents a Higher Low, reminiscent of the pattern seen in April 2023.
Back then, this formation marked the beginning of Tesla’s major bullish leg following the 2022 inflation crisis, which led to a 194.87% surge in stock price. The current setup indicates that a similar rally could be on the horizon.
Supporting this bullish perspective is the Moving Average Convergence Divergence (MACD) indicator, which is currently showing a squeeze.
This technical setup is similar to what was observed in the April-May 2023 period, further suggesting that Tesla’s price could stabilize throughout August before potentially rallying aggressively in September 2024. As long as the MACD does not cross to the downside, the bullish momentum is likely to continue.
Key technical indicators reinforcing the bullish scenario
According to the analyst, a crucial technical indicator to monitor is Tesla’s interaction with the 200-week moving average (1W MA200). Historically, this moving average has acted as a long-term pivot, and Tesla’s recent trading above it strengthens the bullish case. A confirmed break above the 1W MA200 would strongly indicate a continuation of the upward trend.
The $380 target is calculated based on Tesla’s historical performance and technical analysis. It represents a potential gain of 194.87% from Tesla’s recent low, closely aligning with the previous bullish leg.
Additionally, this target is strategically placed just below a critical resistance level at $385, the high from April 5, 2022. Breaking above the initial resistance level at $299.50, the high from July 19, 2023, would likely clear the path for Tesla to reach the $380 target.
Current price action and market sentiment
Tesla’s current stock price stands at $214.14, reflecting a strong recovery with over a 6% gain on the day and an 8% increase over the past week, despite a 16% decline over the past month.
These movements suggest that the market has absorbed the recent correction, positioning Tesla for further gains.
The alignment of key technical indicators, particularly the “Channel Up” pattern and support from the 1W MA200, points to a realistic potential for Tesla to reach the $380 price target within the next two months.
If the company maintains its positive trajectory and successfully implements its new strategies, reaching the $380 target appears highly feasible.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
