Tesla's Stock Is Breaking Out Of A Pennant Pattern

Tesla Inc. TSLA shares are trading higher Monday, likely in sympathy with the stock’s Chinese peers. Chinese electric vehicle makers gained after reporting July numbers.

The stock may also be moving as technical traders noticed the pattern and bought into the breakout.

Tesla was up 4.4% at $717.64 at last check.

See Also: Tesla Stock Is Coiled Up In A Pennant Pattern And About To Break

Tesla Daily Chart Analysis

• Shares look to be breaking out of what technical traders would call a pennant pattern.
• The stock is trading above both the 50-day moving average (green), and the 200-day moving average (blue), indicating sentiment in the stock is likely turning bullish.
• Each of these moving averages may hold as a possible area of support in the future.
• The price was condensed tighter and tighter until there was no place for it to go within the pattern, before the stock finally saw a breakout higher.
• The Relative Strength Index (RSI) has been moving higher and now sits at 68. This shows there have been many more buyers moving into the stock throughout the past weeks.

What’s Next For Tesla?

Bullish traders would like to see the stock continue to move higher as the stock breaks out. Bulls would like to see the stock be able to hold the gains it ' making from the breakout and consolidate for a time.

Bears would like to see the stock move lower and fall below the pattern support line. Bears also want to see a push below the moving averages for a potential change in trend and sentiment.