Tesla (TSLA) experienced a strong bull market rally from a low of $152.37 set on April 27, 2023, to its 52-week high of $299.29 set on July 19, 2023, marking a 96% gain before the bear market began. The recent low of $160.51 represents a bear market decline of 46%.
Despite its strong performance, Tesla has an elevated price-to-earnings (p/e) ratio of 40.6% and does not offer a dividend, as reported by Macrotrends. The stock had a golden cross on June 23, 2023, when the 50-day simple moving average rose above the 200-day simple moving average, leading to the high of $299.29 on July 19, 2023. However, a gap lower on July 20 signaled the start of the bear market decline.
The 200-day simple moving average became a key level between $214.68 on October 20, 2023, and $231.01 on January 10, 2024. The stock then broke below this moving average on February 1, 2024, leading to a bearish warning and a decline to the monthly value at $163.34. The horizontal line at $178.63 serves as a weekly pivot for the stock, while the line near the high at $271.27 is the annual risky level for traders to watch.
On the weekly chart, Tesla is currently negative but oversold, trading below its five-week modified moving average at $183.29 and well below its 200-week simple moving average at $225.91. The 12x3x3 weekly slow stochastic reading is at a highly oversold level of 14.70, indicating extreme weakness in the stock.
A trading strategy for Tesla suggests buying on weakness to its monthly value level at $163.34 and reducing holdings on strength to its 200-week simple moving average, or “reversion to the mean,” at $225.90. Overall, Tesla’s recent performance has been marked by significant highs and lows, with the stock currently oversold and facing challenges in the bear market. Investors and traders should remain vigilant and adjust their strategies accordingly to navigate the market volatility surrounding Tesla.
