Tesla stock has been on fire, rallying more than 50% from the 2022 low. Here’s how to trade it ahead of the shareholder meeting.
Tesla (TSLA) – Get Tesla Inc. Report stock has been on fire. The stock is roughly flat on Thursday, but the automaker has quietly strung together a massive recent rally.
If Tesla stock finishes higher on Thursday, it will mark its seventh straight daily gain. The shares have already rallied in 14 of the past 16 trading sessions.
In all, the shares have rallied more than 20% from last week’s low and more than 50% from the May low. The move comes ahead Tesla’s annual shareholder meeting tonight — the one in which investors will vote on whether to approve a 3-for-1 stock split.
Trading Tesla Stock Ahead of Shareholder Meeting
Daily chart of Tesla stock.
Chart courtesy of TrendSpider.com
The stock tiptoed higher into its quarterly report, then exploded higher once the EV leader reported earnings in mid-July.
And it hasn’t been alone. Ford (F) – Get Ford Motor Company Report stock has also been racing higher, with earnings being a bullish catalyst for it as well.
Ford shares rallied almost 30% in the days following its results, and surprisingly, actually edged out Tesla’s gain from the 2022 lows with a 52.2% rally. I think Ford’s participation has also helped give Tesla a boost.
Now that Tesla is running into some key areas on the chart, the bulls want to know what’s next.
A couple of weeks ago, I outlined a path to the low-$900s, citing the 200-day moving average and the weekly VWAP as the upside targets. Looking at the chart, one can see how the shares chopped around these two measures on Monday and Tuesday, momentarily pushing through them but failing to close above them.
While it’s quite healthy to see Tesla stock pushing higher now, traders who have been long the stock and have caught a nice portion of this rally should consider taking some profits on this move.
If the stock can maintain above $900 and these measures, it could be setting the stage for a push into the $1,000 to $1,050 area. In this zone, we’ll find the 61.8% retracement and downtrend resistance (blue line).
It’s also worth mentioning just how key a psychological level like $1,000 can be.
If we see a pullback instead, the bulls would love to see the 10-day moving average come into play as support. Just below that is the $835 to $855 area, which is the 61.8% and 50% retracement zone from this week’s high to last week’s low.
Below that and we may need to let Tesla stock reset before taking another stab at it on the long side.
While we’re still in a bear market overall, these types of upside moves can continue for longer than expected. If that’s the case, Tesla stock may not be done rallying.
