Watch These Tesla Levels as Stock Rises After Musk Says DOGE Role Will Diminish
Key Takeaways
Tesla (
TSLA
) shares jumped in extended trading on Tuesday as CEO Elon Musk’s comments during the EV maker’s earnings call overshadowed
quarterly results
that came in well below Wall Street expectations.
Musk told investors
and analysts that, starting next month, he will be allocating far
more of his time to Tesla
and less to running the Department of Government Efficiency. The comments came after Tesla reported bigger-than-expected declines in revenue and profit, as the company’s automotive business slumped amid lower volumes and sagging average sales prices.
Tesla shares have faced heavy selling pressure in recent months over concerns that Musk’s active involvement in the Trump administration has hurt the company’s brand and sales. The stock is down 41% since the start of the year as of Tuesday’s close, significantly underperforming the
S&P 500
’s 10% drop over the same period. Tesla shares gained 5.4% to $250.80 in the after-hours session.
Below, we take a closer look at Tesla’s
weekly chart
and apply
technical analysis
to identify key
post-earnings price levels
that investors will likely be monitoring.
Pennant Pattern in Focus
Since breaking down from an ascending
broadening formation
last month, Tesla shares have consolidated within a
pennant pattern
ahead of the company’s quarterly results.
While
trading volume
eased last week, share turnover has generally increased since the stock found a local bottom in early March, indicating that larger market participants had positioned ahead of time for a significant post-earnings move. Indeed, the shares look set to pop on Wednesday’s open, setting the stage for a potential
breakout
above the month-long pennant pattern.
Let’s identify two key overhead areas that may come into play amid results-driven buying and also locate important
support levels
worth watching during possible profit-taking periods.
Key Overhead Areas to Monitor
A decisive breakout from the pennant pattern could see Tesla shares climb to $315. Tactical traders who expected a post-earnings rally may look for
profit-taking
opportunities in this area near the high of a prominent
countertrend
rally that formed on the chart in August 2022.
The next overhead area to track sits around $384. This level on the chart may provide overhead selling pressure near a brief period of
consolidation
below the stock’s December high, with the area also lining up with the April 2022 peak.
Crucial Support Levels Worth Watching
A
breakdown
below the pennant pattern could initially trigger selling down to $206. The shares may encounter support in this region near last February’s countertrend
swing high
and range of corresponding
price action
on the chart between June and September.
Finally, selling below this level could see Tesla shares revisit lower support around $170. Investors may seek
entry points
in this location near a period of
sideways drift
that developed on the chart throughout most of May and June last year.
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As of the date this article was written, the author does not own any of the above securities.
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