Despite the pessimism surrounding China’s EV sales, Tesla made a breakout from the downtrend that started in mid-summer. Optimism about the Cybertruck and the Nasdaq surge, driven by early rate cut expectations, contributed to the upside move. There are some concerns about subsidies after Germany cut them early for EVs, and there are also some potential positives for 2024. However, Tesla might need more Nasdaq rally to maintain its momentum in early 2024.
(TSLA Daily Chart)
The technical outlook looks very positive for TSLA bulls. The breakout from the downtrend came with strong volume, for three consecutive days, exceeding the average. As the trend was breaking, Tesla recaptured the 100-day moving average as well. Now, the immediate resistance is the Fibonacci 61.8% level of the July-October retreat, at $260. A breakout might trigger a move towards the previous top in the coming weeks, depending on how bullish the Nasdaq remains. Regarding downward moves, the 100-day moving average might become the main support to follow, at least in the short term.
