The Tesla share price ended the previous week on a solid footing after gaining 4.68%. It looks to continue on this bullish path as it towers above the 900.00 mark in premarket trading, even as the company celebrates its 20th anniversary and a 3-million-car milestone.
The bullish sentiment on the Tesla share price comes after the Soros Fund Management LLC doubled down on its bullish position on tech stocks by snapping up 29,883 shares. This acquisition came when Tesla and other tech stocks were heavily offered as the Nasdaq 100 index plunged. However, the renewed interest is coming into Tesla after shareholders approved a stock split just two years after the previous one.
Historically, interest in tech stocks in the US has increased just before a stock split. In 2020, Tesla performed a stock split and saw significant demand for the stock in the days before and after the split, sending it to record highs. The company said last week it was splitting its stock based on 3 new shares for every 1 share held. The Tesla share price is due for adjustment on 25 August when the stock split is complete.
The price action is on the verge of a breakout above the bullish pennant. A 3% closing penetration above the 888.37 resistance, which intersects the pennant’s upper border, completes the pattern and opens the door for a measured move that aims for completion at 1025.26. This resistance target, the site of previous highs of 24 March and 13 April 2022, will only become available on a break of 949.96 (4 May high) and the 1000.00 psychological barrier (26 April high).
Conversely, a retreat from current levels, which breaks down the 828.50 support (17 March and 28 April lows), targets the 779.23 pivot (10 May 2022 low) in a move that also invalidates the bullish pennant. If the bulls fail to defend this support, the bears will have access to the other downside targets at 726.65 (11 May and 2 June lows) and 693.75 (7 June and 14 July lows).
This post was last modified on Aug 15, 2022, 14:59 BST 14:59