Tesla Stock Finally Relents To Options Market Expectations: What's Ahead?

Tesla Inc TSLA stock finally relented to the resistance levels priced-in by the options market last week after bull-dozing its way to recent highs of over $276 on Wednesday. The stock closed over 3% lower on Friday at $256.60 — just between the support and resistance level factored in by professional options traders last week.

With increasing expectations of a market correction and extended rate hike concerns gaining momentum, it is unlikely that tech stocks will continue their rally with the same enthusiasm seen earlier this year, at least for a while.

Also Read: Everything You Need To Know About Tesla Stock

Under these circumstances, here's a look at the options market outlook on Tesla stock for this week:

1. Resistance: There is significant open interest build-up at the $300 Call strike for options expiring on June 30. This indicates professional traders are convinced the stock is unlikely to breach the level on the upside this week. The $270 Call strike is also showing relatively higher open interest accumulation, though not as convincing a figure as is displayed by the $300 strike.

2. Support: On the downside, although the $250 Put strike has relatively higher open interest accumulation, it isn't very convincing. This possibly shows traders could be maintaining caution in the near term in case the overall market witnesses a sell-off. The $250 level may act as the first line of support in case of a minor correction.

Open interest figures only provide a fair idea about support and resistance levels. Any major news break or macro event could lead to a significant movement in stock prices and cause a subsequent shift in open interest levels.

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