Is Tesla’s Engine Still Going?

Is Tesla’s Engine Still Going

In May, this year, Tesla Motors got a boost of power and the price of its stocks started to rise at an alert pace. In less than 5 months the stocks gained 230%. Today it has reached another high at 189.69, getting one step closer to reaching 200$ per share.

The engine that pushed the price that far from the April levels gives now some bad signals. The trend continued to rise fast, but the volumes started to drop. Dropping volumes on a move usually means that the move might turn around in the near future. Another signal would be the negative divergence that appeared on the 28 days RSI.

Chart: TSLA, Daily

We are expecting the price to keep on rising, targeting 200$ per share or even slightly above. This growth could be followed by a drop back to 160$ per share, an ex-resistance. The fall could occur right before or during the earning reports period.

Tesla Motors is expected to report an estimated earnings of 0.12$ per share. If it will surprise the markets like it did in the second quarter, than our setup could be invalidated and the price might break 200 level. On the other hand not meeting these expectations we might see a steeper drop.

 

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