Tesla's Stock Rips Higher, Busting Through A Key Resistance Level

Tesla Inc TSLA has taken to the top of the annual American-Made Index (AMI) published by Cars.com for the first time ever. The pandemic has caused many American companies to struggle and put thousands of its citizens out of work, which has put a spotlight on the message to spend on homegrown businesses.

Tesla hasn’t struggled through COVID-19 like millions of small businesses across the country but due to global trade and modern manufacturing, it can be difficult for consumers to find products that are truly American made. Tesla’s Model 3, specifically, ranked at the top of the Cars.com list, surpassing Ford Motors Company’s F Mustang. Tesla’s Model Y took third place.

Tesla’s stock has always been popular too, and on Wednesday made another big break north.

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The Tesla Chart: On Thursday, Tesla’s stock gapped up over a resistance level at $660 after busting through a key level at $630 on Wednesday. The stock had formed into an ascending triangle and had attempted to break up through it six times before succeeding.

The triangle was formed after Tesla’s long sideways consolidation phase where it lost almost 40% between its Jan. 25 all-time high of $900 and a May 19 low near the $550 mark. The latter date marked a reversal for Tesla’s stock.

Within Thursday's first two hours of trading, the volume in Tesla’s stock had already surpassed half of its average daily trading volume. 

Tesla is trading above both the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day EMA, which is bullish for the stock. It's also trading above the 200-day simple moving average, which indicates overall sentiment in the stock has returned to being bullish.

Bulls want to see continued momentum with high bullish volume to push Tesla up over its next resistance level near the $700 level. If it can regain that level as support, it has room to move up toward $745.

Bears want to see bearish volume come in to pressure Tesla’s stock down to fill the gap it left on Thursday which is back near a support level at $630. If Tesla’s stock was unable to hold that level as support it could revisit the $600 level.

TSLA Price Action: Shares of Tesla were trading up 5.3% to $691.46 at publication time.