Tesla Motors Inc (NASDAQ:TSLA) has struggled in 2016, suffering 18% losses with about a month left to go. TSLA stock investors have endured a bumpy ride that has included concerns over car deliveries, an acquisition of SolarCity Corp (NASDAQ:SCTY) and the potential for more shareholder-diluting equity raises.
While Tesla stock still is stuck in a choppy mess from a trading perspective, the price action over the past three weeks has drawn my eye. In fact, I’m very interested in the comings and goings of TSLA right now, which is why I’m sharing my thoughts.
When I last discussed TSLA stock on Aug. 30, I said that in the near-term, shares still needed further to fall until a better big-picture technical support area could help the bulls. I circled the $200 area as a next near-term downside target, which the stock ended up reaching just three trading days later.
Since then, Tesla Motors has been a choppy mess, and not really worthy of my hard-earned capital.
On Nov. 21, Tesla announced that it had closed its acquisition SolarCity, and TSLA shares have been on a three-day rally since. That doesn’t make a new trend, but it has put Tesla back on my radar.
TSLA Stock Charts
On the multiyear weekly chart, we see that Tesla stock has in essence been stuck in a big trading range ever since topping out in September 2014.
Although the stock saw an overshooting move to the downside early this year, the red 200-week simple moving average has become a better reference support area to focus on.
Either way, from this angle, TSLA stock is now simply trading at the lower end of the big-picture range. As long as this support holds, I think the range remains intact.
If we zoom in a little closer on this weekly chart, however, we’ll see some noteworthy price action over the past three weeks.
Note that the weekly candles prior to last week both closed well off their intraweek lows. Thus, Tesla rejected the bears trying to push shares below the $180 mark.
This was followed last week by the aforementioned rally, which the way I look at markets, constituted a follow-through buying week. So for the near-term (and maybe longer), TSLA stock’s recent lows around $180 look to have good support.
I’d like to see a little more price stabilization in TSLA stock, active investors could consider taking new trading longs in the stock. Use $180 as a stop-loss area, while $210-$220 should be your next upside target.
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