Key Support and Resistance in Tesla Stock after Its 3Q17 Results

In the previous part of this series, we looked at Wall Street analysts’ latest recommendations on Tesla stock (TSLA). The majority of analysts are suggesting a “hold” on the company at the moment. Tesla stock posted a fresh all-time high near $389.61 on September 18 and has already risen by 50.3% in 2017 so far as of November 1. By comparison, General Motors (GM), Ford (F), and Toyota (TM) were trading with about 23.8%, 1.8%, and 6.2% YTD (year-to-date) gains, respectively.

Tesla’s significantly higher YTD gains (XLY) could be one of the reasons why analysts don’t expect any significant upside potential in its stock and thus have given a price target that’s not far away from its market price. Now, let’s move on by looking at updated technical support and resistance levels for Tesla.

On November 1, Tesla stock settled at $321.08 at the end of the regular trading session but fell further to $304.90 in after-hours trading on the same day. The 200-day simple moving average on the daily chart was at $318.6 and suggested weakness in price action.

The 14-day RSI (relative strength index) was hovering at 41.7, below the equilibrium line. An RSI indicator below the line of equilibrium reflects a negative bias in the underlying momentum.

A key support level is near the $282 price level and a possibility of the price testing this support level remains open in the coming sessions. An immediate resistance in Tesla stock lies near $339.

Tesla stock has formed a head and shoulders technical pattern on its daily price chart. In technical analysis, a head and shoulders pattern is considered a possible trend reversal pattern when confirmed by increased volume at the time of a neck-line breakout. An expected price target for this head and shoulders pattern could be near $395, also confirming negative sentiments.

In the final part of this series, we’ll take a quick look at analysts’ earnings estimates for Tesla’s 4Q17.