Tesla's Stock Steers Into Triangle And Looks To Choose Direction

With an abundance of news on a weekly basis, it's no wonder Tesla Inc’s TSLA stock can swing wildly. Traders and investors also have to be prepared for how CEO Elon Musk’s tweets can affect Tesla’s stock price.

On Thursday, Tesla hosted its model S Plaid release event and Musk said it had begun deliveries of the electric four-door sedan and plans to increase deliveries to over 1,000 per week in the third quarter. The delivery announcement was good news for the company after Musk had delayed the event by a week when he announced in a June 3 tweet the vehicle needed “one more week of tweak.”

On Friday, two German environmental groups, Gruene Liga and NABU, filed an objection with the Brandenburg environmental authority against one of Tesla’s permits for its Gigafactory near Berlin, according to Reuters. The group also accuses Tesla of changing an application document relating to battery cell production at the site and says Tesla has not yet obtained the necessary permits.

Despite the see-saw of good news and bad news, Tesla’s stock has tightened toward the apex of a triangle and looks set to choose a direction soon.

See Also: How To Buy And Sell Tesla Stock

The Tesla chart: After falling into a daily downtrend on April 14, Tesla’s stock found a May 19 bottom of $546.98 and reversed back upwards, putting in higher lows. This pattern of higher lows with lower highs has created a triangle with an apex of June 16. Tesla’s stock should break up bullish or down bearish from the triangle before that date.

Tesla’s stock is pinned between the eight-day exponential average (EMA) and the 21-day EMA, with the eight-day EMA trending below the 21-day EMA, which indicates indecision. Tesla was able to cross over the 200-day simple moving average (SMA), which indicates overall sentiment is bullish. Bulls will want to see Tesla continue to hold the 200-day SMA as support.

Bulls will also want to see Tesla regain support of the 21-day EMA, which will happen if the stock breaks up above the downward sloping trendline of the triangle. If Tesla’s stock can pop above the trendline, it can fly towards $624.62 before meeting another resistance level.

Bears want to see bearish volume enter the stock to drop it back down below the eight-day EMA and towards the lower ascending trendline of the triangle. If Tesla’s stock was unable to hold the bottom of the triangle as support it could fall toward $571.22.

TSLA Price Action: Shares of Tesla trade around $610.11 at time of publicaiton.