Tesla’s (NASDAQ: TSLA) stock has been on an upward tear in the fourth quarter, with technical indicators suggesting sustained momentum as the year ends.
The stock received a significant boost from Donald Trump’s election victory, with investors optimistic about his close ties with CEO Elon Musk. Additionally, better-than-expected Q3 2024 earnings pushed the stock to new highs.
However, the recent rally has encountered resistance at $500, and short-term weakness has emerged. At the close of the last session, TSLA was valued at $421.06, down more than 3%, extending a weekly loss of 4.4%. Despite this, Tesla’s stock remains up nearly 70% year-to-date in 2024.
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Tesla stock’s end-year momentum
Regarding TSLA’s technical setup, an analysis by charting the TrendSpider platform suggests that Tesla might be gearing up for a possible ‘end-of-year fireworks show.’
In an X post on December 20, the platform noted that after a sharp rally starting in late October, Tesla is now consolidating in a bullish flag. This setup often signals the continuation of an upward trend.
In this case, the current consolidation phase could pave the way for another breakout.
Supportive technical factors back this potential move, with volume-by-price data showing healthy buying interest between $250 and $300, creating a support base.
Additionally, lighter trading volumes near $400 to $450 suggest fewer barriers to further upside.
Puedonymous trading expert Micro2Macr0 also identified another bullish technical setup for Tesla share price in an X post on December 20.
The analysis noted that Tesla appears to be entering a ‘Phase 4’ of its long-term breakout. The stock has decisively breached a key downtrend resistance line intact since its 2022 peak.
This breakout aligns with a strong push above the $300 to $350 consolidation zone, suggesting the potential for further upside. After consolidating in accumulation zones between $150 and $350, TSLA’s recent move above $350 confirms the reversal and positions it for additional upside.
To this end, the technical analysis projects potential targets between $500 and $630, with a measured move suggesting a 39% rally from current levels.
Tesla’s key fundamentals for a record-high
Indeed, the bullish technical outlook follows Tesla’s recent short-term price correction, which some analysts, such as TradingShot, have dismissed as temporary. As reported by Finbold, the expert noted the EV maker has the potential to hit the $1,000 record high by the end of 2025.
Notably, ending 2024 on a strong note will be key to helping Tesla build momentum for 2025, which remains a crucial year for the company as investors anticipate major developments regarding autonomous driving technology and artificial intelligence (AI).
At the same time, the political tailwinds will likely be key in determining Tesla’s next move. For instance, there are chances of deregulation under the Trump administration, including eased crash reporting requirements and potential fast-tracking of autonomous vehicle approvals, which could reduce legal hurdles for the Texas-based company.
Wall Street analysts take on Tesla stock price
On the other hand, Wall Street analysts have also offered a mixed outlook for the stock. As reported by Finbold, Mizuho Securities and Wedbush have raised Tesla’s price target to $515, citing the positive impact of elements such as changes in autonomous driving regulation, Trump-era policy benefits, and a strong product pipeline, including the Model Q and Cybercab by 2027.
Mizuho values Tesla at $1.8 trillion, with $711 billion attributed to core businesses, $614 billion to self-driving and Robotaxi opportunities, and $472 billion to humanoid robotics.
Wedbush’s Dan Ives projects Tesla’s market cap reaching $2 trillion by 2025, emphasizing a $1 trillion opportunity for AI and autonomous vehicles. The analysts expect Tesla’s market dominance to drive growth despite tariff and EV credit removal risks.
Elsewhere, Truist’s William Stein raised his price target to $360 (from $238) but kept a ‘Hold’ rating. He attributes recent gains to Musk’s political ties rather than near-term earnings. While he sees potential long-term benefits from pro-autonomous driving policies, he remains cautious.
In conclusion, Tesla’s stock is showing a strong bullish potential, with a possible breakout to $500 and beyond. However, caution is needed due to short-term fluctuations and mixed analyst views.
Featured image via Shutterstock
