Tesla Stock Has Technical Support in Place

A round of upgrades could provide tailwinds as well

Jan 4, 2024 at 12:25 PM
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Subscribers to Schaeffer's Weekend Trader options recommendation service received this TSLA commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

The shares of electric vehicle (EV) powerhouse Tesla Inc (NASDAQ:TSLA) just pulled back to the round $250 level, an area that coincides with its $800 billion market cap. There's additional support from its 126-day moving average that was supportive in August and resistant in November, as well as the October breakdown level from a trendline connecting April, August, and September lows. The $246.36 represents a 100% year-to-date gain for TSLA, and the shares are trading well above that mark heading into 2024.

 

TSLA wt

It seems like the only thing going against Tesla stock is sector skepticism in the media in recent weeks. However, despite this suspicion, the security broke out above a trendline connecting lower highs from July to late-November. The brokerage bunch, meanwhile, is also hesitant on the EV stock, with 27 of 44 covering brokerages rating the equity a “hold.” A shift in analyst sentiment could help the shares move higher still.

Lastly, within the options market, total open interest (OI) is relatively low. In fact, total OI is below 80% of the readings from the past 12 months. Our recommended call option has a leverage ratio of 7.7, and will double on a 14.9% in the underlying equity.

 

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