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Tesla Inc. (TSLA) has made significant strides in the stock market over the years, from a little-known electric car manufacturer to a household name and one of the biggest companies globally. Technical analysis of Tesla shows patterns and trends that investors can analyze to predict future price movements.

Tesla’s stock rose from around $100 per share to over $800 per share, an increase of over 700% in 2020. However, its peak in early 2021 made the stock overvalued and led to a downtrend. Recently, Tesla stock has shown signs of a potential reversal and broke above its 50-day moving average, indicating the end of the downtrend.

Traders often use short-term trends to make day-to-day trading decisions. They use tools like the Fibonacci retracement to indicate areas of support or resistance at key levels of 23.6%, 38.2%, 50%, 61.8%, and 100%. Tesla stock is currently trading just above the 61.8% retracement level, which has acted as support in the past, indicating a bullish short-term trend.

Another popular short-term indicator is the Relative Strength Index (RSI). The reading below 30 suggests that the stock is oversold, while a reading above 70 suggests that the stock is overbought. Currently, Tesla’s RSI is sitting around 50, suggesting that the stock is neither oversold nor overbought.

• Q: What caused Tesla’s stock to fall from its peak in early 2021?
• A: One of the biggest factors in Tesla’s stock falling from its peak in early 2021 was the broader rotation out of high-growth, tech stocks and into value stocks.
• Q: Is Tesla’s stock a good long-term investment?
• A: It depends on individual investment goals and risk tolerance. Tesla’s stock has been highly volatile in recent years, so it may be worth considering if comfortable with that level of risk.
• Q: What are some of the risks associated with investing in Tesla’s stock?
• A: Competition from other electric vehicle manufacturers, issues with production and delivery, changing government policies or regulations in the electric vehicle industry, and general market volatility and economic conditions are some of the risks associated with investing in Tesla’s stock.

Tesla’s stock has been one of the most talked-about and volatile stocks in recent years. The company’s growth and innovative products make it an attractive investment for many, but it comes with its associated risks. Using technical analysis like charting tools and indicators can help investors make informed trading and investment decisions.
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Ihab Salloum