The Tesla share price (TSLA) was lower by $17 in Thursday’s trading session. Closing the day -2.5% lower, at $677 per share.
Up until recently, the Tesla share price could do no wrong. Holders of Tesla stock were rewarded handsomely in 2020. Inclusion in the S&P 500 Index, Democrat Joe Biden’s election win (and subsequent Stimulus packages), and accommodative monetary policy helped propel the auto-maker to dizzying heights.
Having gained 900% in 2020, the Tesla share price had no plans of stalling in 2021. Starting the year at $720, the stock went on to gain a further 27% by the end of January before eventually finding a top at $900.40.
Since the January high, the Tesla share price has seen extreme price volatility. By early March, the price had dropped by -40% to $540.
By the 14th of April, the Tesla share price had recovered to $781, gaining +45% on the month.
The recent news feed has not been supportive of the Tesla share price. Earlier this month, a Tesla customer protested the company at the Shanghai auto show. An ill-worded response drew criticism from a Chinese state media outlet, which branded Tesla as ‘arrogant.’
This public relations disaster followed an investigation into Tesla over a fatal crash in Texas, in which two occupants sadly lost their lives.
Initial reports suggested the Model-S sedan was driverless and operating Tesla’s driver-assist system at the time of the incident. Company founder Elon Musk has vigorously denied this claim.
The upwards trajectory in Tesla stock has clearly waned. This is evident in the 50-Day Moving average crossing below the 100-Day Moving average. Technical analysts refer to this occurrence as a ‘bearish crossover’ or, more ominously, as a ‘death cross.’
This signal tells us that momentum in the Tesla share price has now turned bearish and could lead to a deeper decline.
An ascending trend line, in place from the June 2020 low of $183, offers support at $641. Below that level, the 29th of March high at $591 and the 200-Day Moving Average become the next levels to watch.
An ascending trend line at $757 offers the first level of resistance. This links the January 2020 all-time high and the 14th of April high at $781.
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