Shares of Tesla fell 100 points from Mid-December to early February for no apparent reason besides the general bearish climate. The selling was so severe that it seemed like Tesla was being sold due to some imagined link with the price of crude oil. That would be like selling shares of Ford because the price of hay is falling.
To its credit, however, since the February low, Tesla has been the very model of a short squeeze. A whopping 28% of the float is short, which has fueled a rocket-like trajectory, launching shares 52% in a little over a month.
There is a great deal of skepticism about the general market rally, which is the main reason it persists. Similarly, TSLA appears headed for the long-term downtrend line around $220, despite Volume Resistance at this level ($215) from a large Volume Node that was formerly the TSLA Volume Profile Point of Control (See accompanying chart.)
An upgrade by Baird on Monday is also helping the Musketeers. The new $300 price target was not supported by any new insight into Tesla, however, and there has not been much in the way of actionable news coming out of the company, either.
Technically, $215-$238 is a key resistance zone for the stock. That said, the fate of TSLA shares depends mostly on the path of the general market. If we fall into a bear phase, then TSLA falls below $100. If the market fools the skeptics and makes a new high, which is now my own expectation, then TSLA should fill the gap at $238.
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