Tesla (TSLA) surges 6.04% on three-day rally, extends 6.47% gain as bullish continuation signals from technical indicators and key support/resistance alignment.

Tesla (TSLA) has surged 6.04% in the most recent session, extending a three-day rally with a cumulative gain of 6.47%. This upward momentum suggests a potential short-term bullish continuation, with key support levels likely forming around the prior consolidation zone near $346.07–$347.6 (September 8–10 lows) and resistance at the recent highs of $368.99 (September 11). A breakdown below $346.07 could trigger a retest of the $334.09–$335.16 (August 3–4) range, while a breakout above $368.99 may target the psychological $380–$400 level.

Candlestick Theory

The recent three-day rally forms a bullish "three white soldiers" pattern, characterized by consecutive higher highs and higher lows. This pattern often signals continuation of the prevailing trend, particularly when accompanied by increasing volume. Key support levels include the $346.07–$347.6 range and the $334.09–$335.16 zone, while resistance is at $368.99 and potentially $380. The absence of bearish reversal patterns (e.g., dark cloud cover or evening star) suggests the uptrend remains intact for now.

Moving Average Theory

The 50-day moving average (currently ~$345) is above the 200-day MA (~$325), confirming a medium-term bullish bias. The price has recently crossed above the 50-day MA, reinforcing the short-term uptrend. The 100-day MA (~$335) acts as a dynamic support, and a sustained close above this level would strengthen the case for a continuation. Divergences between the 50/100-day MAs and price action are minimal, indicating alignment in the trend.

MACD & KDJ Indicators

The MACD line (12,26,9) has crossed above the signal line, forming a bullish crossover, while the histogram shows expanding positive momentum. The KDJ (Stochastic RSI) indicator, with %K at 72 and %D at 68, suggests the stock is approaching overbought territory. However, given the strong trend, overbought conditions may persist without immediate reversal. A divergence between the MACD and price action could signal a potential pullback, but for now, the indicators align with the bullish bias.

Bollinger Bands

The Bollinger Bands have widened in recent sessions, reflecting increased volatility. The price is currently near the upper band, which typically indicates overbought conditions. However, in a strong uptrend, the upper band may act as a temporary resistance rather than a sell signal. A break above the upper band could extend the trend, while a retest of the lower band (~$335) would test the strength of the rally.

Volume-Price Relationship

Trading volume has surged on the recent rally, with the September 11 session recording $37.49 billion in turnover—the highest in the dataset. This validates the strength of the price action. However, a decoupling between volume and price (e.g., rising prices with declining volume) could signal exhaustion. For now, the volume profile supports the continuation of the uptrend.

Relative Strength Index (RSI)

The 14-period RSI is approaching 70, indicating overbought conditions. While this does not guarantee a reversal, it serves as a cautionary signal. A sustained close above 70 would suggest strong momentum, while a drop below 60 would indicate weakening bullish momentum. The RSI has not shown bearish divergence yet, but traders should monitor for such signals as the stock tests key resistance levels.

Fibonacci Retracement

Applying Fibonacci retracement levels between the recent swing low ($329.36 on August 5) and swing high ($368.99 on September 11), key levels include 23.6% ($357.8), 38.2% ($351.4), and 50% ($349.2). A breakdown below the 50% level would invalidate the short-term bullish case, while a breakout above $368.99 could target the 61.8% retracement at $356.6.

Backtest Hypothesis

A backtesting strategy could involve entering long positions when the 50-day MA crosses above the 200-day MA (a "golden cross") and the RSI is below 30 (oversold), with exits triggered by a 20-day MA crossover or a 10% stop-loss. Historical data from 2024–2025 shows the 50/200-day MA crossover occurred on January 21 (price: $424.07), aligning with an RSI below 30. A long entry at that point would have captured a 35% gain by March 11 (price: $573.09). However, the strategy would have faced a false signal on June 23 (price: $348.68), where the RSI was oversold but the trend reversed after a 10% drawdown. This highlights the importance of combining moving average signals with volume confirmation and Fibonacci levels to filter high-probability setups.