Tesla’s stock has been in a recovery mode this week, healing its injuries from a three-month low of 539.00. On Wednesday, however, the electric car maker saw its efforts falling behind near the 50-period exponential moving average (EMA) on the four-hour chart despite crawling above the 700.00 mark.
Although the RSI has violated its downward trend, it is still below its 50 neutral level and seems to be losing steam, flagging that bearish forces have not faded yet. Also, the price itself continues to endorse the lower highs and the lower lows below the record high of 899.98, while the tiny distance between the 20- and 200-period EMAs remains a worrying trend signal. A bearish cross between the lines could further strengthen the case of a down-trending market.
It is also worthy to note that the 20- and 50-day EMAs have already bearishly intersected each other on the daily chart.
If the 200-period EMA keeps firm support under the price, another battle could take place near the 50-period EMA at 711.00. The 50% Fibonacci of the January downfall is marginally higher, and should it give way, the door would open for the swing high of 744.22. Beyond the latter, the next pivot point could develop around the 61.8% Fibonacci of 785.13.
In the event the floor around 650.27 collapses, the 23.6% Fibonacci of 624.20 could quickly come to the rescue, deterring any decline towards the 600.00 level. If sellers claim the latter too, the stock could tumble to test its 3-month low of 539.00.
Briefly, Tesla’s stock remains exposed to negative risks despite its latest upturn above the 700 number. A higher high above 744.22 could raise buying confidence in the market, while a drop below 650.27 could trigger a fresh selling wave. Overall, the bearish structure in the short-term picture is still in play.
