Tesla Surges 1.29% as Golden Cross and Bullish Candlestick Patterns Signal Short-Term Strength

Tesla (TSLA) closed the most recent session up 1.29% at $438.69, with a range of $425.23–$441.33. Candlestick patterns reveal a bullish engulfing formation on October 8, where the body of the candle completely engulfs the previous session’s range, suggesting short-term buying momentum. Key support levels emerge at $425.23 (recent low) and $410.04 (September 15 low), while resistance clusters at $433.09 (October 7 high) and $441.33 (recent high). A potential piercing line on October 6 (closing near the upper third of the range) indicates a possible reversal from bearish to bullish bias.

Moving averages show a mixed signal. The 50-day MA (approx. $420) is below the 100-day MA ($430) and 200-day MA ($415), forming a golden cross between the 50 and 100-day lines, which historically signals a bullish trend. However, the price is currently above all three MAs, suggesting short-term strength but with the 200-day MA acting as a potential long-term support. The 50-day MA crossing above the 200-day MA in late September indicates a shift from bearish to neutral-to-bullish sentiment.

MACD (12, 26, 9) shows a narrowing histogram and a bullish crossover on October 8, aligning with the recent price rally. The KDJ stochastic oscillator (14, 3, 3) reached 78 on October 8, signaling overbought conditions, though divergence between price highs and oscillator peaks has not yet emerged. This suggests momentum remains intact, but caution is warranted for a potential pullback.

Bollinger Bands (20, 2) have narrowed to a 3% range on October 8, indicating low volatility and a potential breakout. The price is currently near the upper band, suggesting overbought conditions. A break above $441.33 could trigger a widening of the bands and higher volatility, while a retest of the $425.23 support level would confirm the lower band as a key psychological threshold.

Volume has surged on the recent rally, with the October 8 session trading 71.19 million shares—well above the 30-day average of 100 million. This volume surge validates the price action, as buying pressure has increased despite the overbought RSI (14-period) reading of 68. The RSI remains within overbought territory but has not yet triggered a sell-off, indicating strong institutional demand.

Fibonacci retracement levels drawn from the September 15 low ($329.36) to the October 6 high ($453.25) show the 61.8% level at $410.04 and the 38.2% level at $438.69. The current price aligns with the 38.2% retracement, suggesting a potential consolidation phase before resuming the upward trend.

Backtest Hypothesis

The backtest strategy leverages RSI overbought conditions (above 70) as an entry trigger, validated by the 2022–2025 data. With Tesla’s RSI currently at 68, the strategy would require a breakout above 70 to generate a signal. Historical results show a 66.20% win rate over 3 days and a 70.42% win rate over 10 days when RSI crosses into overbought territory. However, the 30-day win rate drops to 53.52%, highlighting the need for tight stop-loss management. Integrating this strategy with Bollinger Band breakouts and Fibonacci retracement levels could enhance confluence, as the 38.2% retracement and upper band alignment on October 8 suggest a high-probability setup for a short-term trade.