Tesla Stock Crosses Final Resistance: Will it Rally to a Record High Soon?

Key Insights

• Tesla stock has jumped above a crucial resistance level.
• The rally has invalidated the forming double-top pattern.
• The stock will likely continue rising and possibly hit its record high.

Tesla stock continued its strong uptrend this week. It reached ts highest point since February 25, crossing a major resistance level. This rally may continue, potentially pushing it to its all-time high of $497.

Tesla Stock Price Crosses Crucial Resistance Level

TSLA stock has made a modest recovery this month, moving from a low of $337 on April 9 to a high of $415. It has now crossed the important resistance level at $410. This invalidated a double-top pattern that has been forming.

The rebound comes after the Tesla stock formed a near-perfect falling wedge pattern. This pattern is made up of two descending and converging trendlines. With this, a rebound formed as they near their confluence level.

Tesla shares have moved above the 38.2% Fibonacci Retracement level. It has crossed the 50-day and 25-day Exponential Moving Averages (EMA), confirming the uptrend.

Meanwhile, the common Relative Strength Index (RSI) has continued rising. It’s a sign that the upbeat momentum is gaining steam. Therefore, the most likely TSLA stock forecast is bullish, with the next main target being the all-time high of $496.

The bullish outlook will become invalid when the stock drops below $362. That was its lowest level on April 27, and the neckline of the double-top pattern.

Tesla Stock May Benefit as Gasoline Prices Surge

The ongoing Tesla stock price rally is happening as gasoline prices jump in the US amid the ongoing Iran conflict. American Automobile Association (AAA) data shows that the average gasoline price has jumped to $4.546. Diesel costs $5.6, a trend that may continue as the ceasefire remains.

Soaring gas prices are bullish for Tesla and other electric vehicle manufacturers because customers may start considering them. Besides, most EVs have added their range in the past few years. The charging infrastructure has continued to improve.

Tesla will be the top beneficiary if the rising gas prices push consumers to EVs. It has a wide range of models and a strong reputation. At the same time, the elevated tariffs have made it hard for Chinese companies to enter the United States.

Also, many other manufacturers like General Motors and Ford have scaled down their EV bets. This left Tesla to keep gaining market share.

Tesla’s Business is Slowing

This growth will help to offset the company’s recent weakness. The recent numbers revealed that its deliveries dropped in the first quarter. This retreat was offset by higher prices, which helped to boost its revenues. Total automotive sales rose by 16% to $16 billion.

Tesla’s energy generation segment’s revenue dropped by 12% to $2.4 billion. The services and other segment was the best performer as its revenue jumped by 42%.

Still, the company sent shivers by warning that it will not be cash flow positive this year. That’s because it boosts its investments in the artificial intelligence industry. Precisely, the company is spending money on a fabrication plant in Texas in collaboration with SpaceX.

It is also building more products that it hopes will complement its vehicle sales. The core of this strategy is the Optimus robot that will help users conduct repetitive, unsafe, and boring tasks.

While the price has not been made public, analysts estimate that it will cost between $20k and $30k. Still, it is unclear whether the robots will attract demand.

The company’s other ventures are in the taxi business, which will enable users to offer taxi services. In this case, it will launch the cybercab, which will be an autonomous vehicle without a steering wheel.

A key perpetual challenge is that it is highly overvalued because of the Musk premium. It trades at a forward price-to-earnings ratio of 180, much higher than the S&P 500 average of 20. Other top automakers like General Motors and Ford have a multiple of less than 20.

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