Tesla (TSLA) shares extended their post-election rally on Monday, reaching a new all-time high after Wedbush raised its price target for the electric vehicle (EV) maker. The investment firm increased its price target to $515 from $400, suggesting that Tesla could potentially rise to $650 by the end of next year. The revision stems from optimism that the incoming Trump administration could accelerate the company’s self-driving and artificial intelligence (AI) initiatives.
As of Monday’s market close, Tesla shares have surged approximately 85% since the beginning of the year, with a significant portion of these gains coming after the November 5 election. The rally has been fueled by speculation that CEO Elon Musk’s close relationship with President-elect Donald Trump will help expedite the approval processes for Tesla’s projects. Tesla’s stock gained 6% during regular trading on Monday and saw an additional 2% increase in after-hours trading, reaching around $472.
Technical Analysis: Key Levels for Investors to Watch
From a technical standpoint, Tesla’s recent rally has pushed the stock into overbought territory. Following a breakout from an ascending triangle pattern earlier this month, Tesla shares have experienced a sharp upward trend, supported by increased trading volumes. While the relative strength index (RSI) indicates strong bullish momentum, it also points to overbought conditions, which may prompt some investors to take profits in the short term.
To assess where the stock could head next, technical analysts are focusing on key levels that could guide future price movements. Using bar pattern analysis, which studies historical trends to predict future price action, analysts have identified a bullish target around $510. This level aligns with the price action seen in late June and early July, suggesting that the stock could reach this level if the current rally mirrors the strong upward trend observed earlier in the year.
Support Levels to Monitor Amid Potential Pullbacks
Should Tesla experience a pullback, investors are advised to watch the $360 level, where the stock may find initial support. This area corresponds to the top trendline of the ascending triangle pattern. A drop below this level could lead to further declines, potentially reaching the psychological $300 level. Investors may consider buying opportunities in this range, particularly near the prominent July 2023 swing high and the 50-day moving average.
In the event of a significant correction, the stock could retest lower support levels near $265, which is in line with a trendline connecting multiple peaks between October 2023 and October 2024. This area could attract buying interest from investors looking for a more substantial pullback before re-entering the stock.
As Tesla continues its strong upward trajectory, market participants will be closely watching these technical levels to gauge the potential for both short-term corrections and longer-term gains.
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