Tesla retraced to its 61.8% Fibonacci retracement level (blue horizontal line) over July and August. This overlayed with price support (red dashed horizontal line), and the decline was stayed. Since then, TSLA.us has moved higher, with its green 5-week EMA crossing bullishly above its orange 10-year moving average (red circle). Moreover, its weekly RSI has crossed back above 50 (blue rectangle). This is the bullish side of the oscillator and connotes an underlying bullish momentum.
Project Dojo and the Morgan Stanley Upgrade
One of the catalysts for the bullish momentum is an upgrade of TSLA.us stock by Morgan Stanley from equal weight to overweight, with a new price target of $400 per share, lifted from $250 a share. The upgrade is based on Tesla's new machine-learning supercomputer, Dojo.
"Project Dojo" was introduced in 2021 to train models on self-driving and allows Tesla to use simulated data and real-life data, with Morgan Stanley maintaining that it could help Tesla expand beyond the automotive sector.
Tesla stock responded by gapping up on its open for this week, with its share price appreciating by more than 10% yesterday, to close at $273.58.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.