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by Charalambos Pissouros

Is More Correction on the Cards for Tesla?

Tesla Inc (NASDAQ: TSLA) has been in a sliding mode since Wednesday, when it hit resistance near the 338.00 level. Yesterday, the stock closed near the 327.00 level, which provided support from November 26th until December 2nd. Even though the stock continues to trade above the upside support line drawn from the low of June 3rd, it has distanced itself from that line and now it appears to be in a downside corrective mode.

A clear and decisive close below 327.00 may signal that the correction is not over yet and may allow declines towards the lows of November 1st and 4th, at around 309.05. If the share does not find a floor there either, a break lower could open the path towards the 295.00 mark, which is the low of October 25th, and also provided strong resistance on March 14th and April 3rd.

Taking a look at our daily oscillators, we see that the RSI lies above 50, but points down, while the MACD, although positive, lies below its trigger line and points south as well. Both indicators suggest that momentum may turn negative soon and enhance the notion for some further retreat.

On the upside, we would like to see a clear break above 361.00, marked by the peaks of November 20th and 21st, before we start examining whether the prevailing uptrend is back in force. Such a move would confirm a forthcoming higher high on the daily chart and may initially target the high of December 14th last year, at around 378.00, the break of which may extend the recovery towards the 387.00 zone, near the high of August 7th, 2018.

Tesla stock daily chart technical analysis

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