Tesla Could Be Gearing Up For A Breakout Soon: What's Next?

Tesla Inc. TSLA shares are trading slightly lower Tuesday and are hanging near resistance in a pattern the stock has traded in for the past couple of weeks. A break above the resistance level will show strong bullish sentiment in the stock.

Credit Suisse also maintained a Neutral rating on Tesla and raised the price target to $1,025.

Tesla was down 1.23% at $1,036.35 Tuesday at publication.

See Related: Why Tesla's Q4 Results Next Week Are Critical For The EV Pioneer

Tesla Daily Chart Analysis

• Shares are at resistance in what traders call a falling wedge pattern and are possibly looking to see a breakout within the coming days as the price looks as it's ready to break resistance. A resistance break with a period of consolidation could cause the stock to see a strong bullish move.
• The stock trades below the 50-day moving average (green) but above the 200-day moving average (blue). This indicates the stock looks to be trading in a period of consolidation. The 50-day moving average may act as resistance while the 200-day moving average may be support.
• The Relative Strength Index (RSI) has been moving sideways the last few days and sits at 49. This shows that buying and selling pressure is basically equal but with slightly more selling.

What’s Next For Tesla?

Tesla hanging at resistance shows strength as the stock looks to want to break above the level. Once the breakout is confirmed, it may continue climbing for a time as the breakout happens. This is what bulls are looking to see along with a period of consolidation after the breakout once the stock cools off. Bears are looking for the price to be rejected at the resistance level and for it to fall back toward support.