Tesla (TSLA) shares moved higher in early trading Tuesday amid reports that CEO Elon Musk has landed in China with plans to meet with a host of high-level officials in Beijing. With 95,010,000 shares of TSLA still sold short according to the last report on www.shortsqueeze.com, things could get "interesting" today.
Let's review the charts.
In this daily bar chart of TSLA, below, I can see that the shares made a strong rally on Friday and quotes in the pre-market Tuesday put prices around $198. This should put TSLA above the 200-day moving average line.
The On-Balance-Volume (OBV) line shows improvement in May and tells me that buyers of TSLA are becoming more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is crossing the zero line for an outright buy signal.
In the weekly Japanese candlestick chart of TSLA, below, I can see the past three years of price history. The shares are recovering from a significant decline from late 2021 to early 2023. TSLA rallied to the underside of the declining 40-week moving average line. We can also see prior rallies to the line that were unsuccessful.
Trading volume has been heavier since November and the OBV line is making a higher low. The MACD oscillator has been improving for several months but is still below the zero line.
In this daily Point and Figure chart of TSLA, below, we need to focus on two price points -- $200 and $208. Trades at those prices should improve the odds of still higher prices and a $245 price target.
Bottom-line strategy: Traders who are long TSLA should continue to hold. Traders looking to go long TSLA should be patient and buy strength above $208. Risk below $180.
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