Tesla Share Price Resumes Uptrend,As Support Rises to $340

Published by

Written By: Michael Abadha

Nov 22, 2024, 13:26 GMT 13:26

Summary:

Tesla share price dropped in the last two sessions but its upside looks set to continue as investors digest impending end to EV tax credits.

Tesla share price returned to the upside in Friday’s premarket session, gaining 0.5 percent to trade at $341. The recovery followed successive declines in the previous two sessions on news that the incoming Trump administration will scrap the long-running $7,500 tax credits on electric vehicles (EVs).

The ups and downs of Trump presidency for Tesla

Ironically, Tesla’s spike in the last two weeks is attributed to Donald Trump’s election win. Tesla CEO, Elon Musk played a central role in Trump’s win and was recently appointed to lead the Department of Government Efficiency (DOGE). However, the removal of the tax credit presents a challenge for Tesla (NASDAQ: TSLA) and other EV makers as it will make the vehicles more expensive.

Nonetheless, what Trump has taken away from Tesla in the tax credit, he has more than made up for on two key fronts. First, the new administration will initiate more stringent tariffs on imports into the US, which will give American EV makers an upper hand against their Chinese rivals.

Secondly, the Trump administration is expected to deregulate the autonomous driving market, which is good news for Tesla’s robotaxi plans. Sean Duffy, Trump’s nominee for Secretary of Transportation, is on record as supportive of autonomous vehicles as a means of enhancing road safety.

Also, while Alphabet’s Waymo has already rolled out its self-driving vehicles across multiple US cities, the industry regulator, the National Highway Traffic Safety Administration, currently has a cap of only 2,500 autonomous vehicle approvals per year. Therefore, the lifting of the barrier could bring good news for Tesla ahead of its 2026 robotaxi market rollout.

Tesla share price forecast

Pivot: Tesla share price pivots at $340. Action above that level favours the upside. Otherwise, the downside will prevail.

Resistance: The momentum indicator favours the upside. TSLA is likely to encounter the first resistance at $342. Beyond that mark, the stock could test $345.

Support: The first support is likely to be at $338. A stronger downward momentum could test $336.

This post was last modified on Nov 22, 2024, 13:29 GMT 13:29

Written By: Michael Abadha

Michael is a self-taught financial markets analyst, who specializes in analysis of equities, forex and crypto markets. He draws his inspiration from the fact that markets provide an interface through which the world interacts in search of a better tomorrow.