Tesla, Inc. TSLA shares were rallying in premarket trading on Monday, signaling that it might snap a six-session losing streak.
The reversal in fortunes reflects the oversold nature of the stock as it fell to its lowest level since early June amid worries over fresh cuts and their impact on margins.
The relative strength index, a technical indicator that reflects momentum, fell to 32.9, suggesting oversold levels.
On the upside, the stock has resistance levels around $240 and $276. On the downside, support is seen around the $209 and $190 levels.
Chart Courtesy of Benzinga Pro
Some of the increase may also have to do with the broader market recovery from last week’s lackluster phase.
Despite the bounce in Tesla shares suggested by the premarket trend, lingering concerns over demand amid a rising interest rate environment and economic uncertainties will likely keep a lid on gains.
In premarket trading, the stock rose 2.74% to $221.39, according to Benzinga Pro data.
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