Tesla Share Price Approaches YTD Highs As Momentum Remains Upbeat

Summary:
• Tesla share price has risen by almost 20 percent since the week began, erasing almost all the losses incurred since January.

Tesla share price extended its hot streak on Wednesday, gaining 3.2 at the opening of the New York session to trade at $238.65. The EV maker’s share price has risen by nearly 20 percent since the week began, bringing it to the second-highest level YTD.  Tesla’s upside is powered by its forecast-beating sales figures in the second quarter of the year, and the momentum will likely be sustained as the company prepares to announce its earnings figures.

TSLA sold 443,956 vehicles in the three-month period ending June, with the largest share being 422,405 units of its Model 3 sedan and Model Y.  That beat the 439,000 units forecast by FactSet Street, boosting investors’ confidence over its earnings. While the company has struggled in China this year, it was the best-selling EV maker in the first half of the year, with its sales standing at 830,766 units, beating China’s leading EV maker, BYD ‘s 726,153 units. However, the company will be concerned that its second quarter sales figures were 4.8% lower year-on-year, despite slashing prices by $2,000 for models X, Y and S in the US in April.

The company will continue to face stiff competition from China’s EV makers who are enjoying high intensives from the Chinese government. Also, sales in Europe have been dwindling in recent months, and could impact revenues in the coming quarter. As for the Tesla share price trajectory, we are likely to witness sustained gains in the coming weeks, in view of the earnings announcement on July 23 and Robotaxi Day on August 8.

Technical analysis

The momentum on Tesla share price favours continuation of the upside, and the buyers will likely stay in control if they keep the price above the 240.22 pivot mark. In that case, they could encounter the first resistance at 246.50, but a break above that level will strengthen the upside momentum to test 253.32. Conversely, TSLA will likely head lower if the share price breaks below 240.22. The downward action could establish the first support at 234.85, and a break below that mark will invalidate the upside narrative. Also, it could result in a stronger downward momentum to test 229.82.