Tesla Climbs Higher In This Charged Up Trend: Here's What To Watch

Tesla, Inc TSLA was spiking up over 6% higher on Tuesday, despite two analysts lowering their price targets on the stock.

Jefferies analyst Philippe Houchois maintained Tesla with a Buy rating and lowered the price target from $350 to $180. BofA Securities analyst John Murphy maintained Tesla with a Neutral rating and lowered the price target from $135 to $130. While Murphy’s price target is in line with where Tesla is currently trading, Houchois’ target suggests about a 40% upside for the stock.

Tesla was heavily beaten down in 2022, closing the year down 65%. Between Dec. 1 and Jan. 6, Tesla suffered a particularly bearish period, declining almost 50% to reach a two-year low of $101.81.

After reaching the new low, Tesla reversed to the upside and has recently confirmed a new uptrend is in the cards.

An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.

The higher highs indicate the bulls are in control, while the intermittent higher lows indicate consolidation periods.

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The Tesla Chart: Tesla confirmed a new uptrend on Jan. 11, when the stock printed a higher high of $125.95. The day prior, Tesla had negated its downtrend by printing a higher low of $114.92.

• On Jan. 13, Tesla came close to negating the uptrend but found a local bottom at $116.55, which caused the stock to print another higher low. On Tuesday, Tesla was popping up higher to print another higher high to confirm the uptrend is intact.
• Technical traders may have seen a reversal coming for Tesla because, between Dec. 27 and Jan. 6, the stock had developed bullish divergence on the daily chart. Bullish divergence occurs when a stock makes a series of lower lows but its relative strength index (RSI) makes a series of higher lows.
• The bullish divergence on Tesla’s chart has slowly started to correct with the stock’s rising prices. Tesla’s RSI is still measuring fairly low, however, at about 44%, which suggests the stock could continue within its uptrend for some time before becoming overbought.
• If Tesla closes the trading day near its high-of-day price, the stock will print a bullish kicker candlestick, which could suggest higher prices will come again on Wednesday. If the stock closes the trading day with a significant upper wick, the next temporary top is likely in and Tesla could fall lower.
• Tesla has resistance above at $139.53 and $152.19 and support below at $123.80 and $110.07.

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Photo: courtesy of tesla.com