Despite the regular stream of negative news, Tesla's stock continues to rise steadily, albeit gradually. The company's multiples are off the charts, significantly exceeding the average for its market segment. While the standard price-to-earnings (P/E) ratio for the technology sector is 35, Tesla's value stands at 202. A similar pattern emerges across its other multiples, suggesting that the stock is greatly overbought. Quotes are now positioned almost midway between the lows of March and the highs of January. In May, the corporation's top management set a new record for insider stock sales. Nevertheless, this did not hinder the continued bullish price move.
From a technical perspective, quotes have breached a descending resistance line and consolidated above it, forming a positive signal. A surge over the local peak of $370 per share would probably incite sellers' stop-loss orders, precipitating a short squeeze that could propel the price even higher. Beyond this level, new buyer interest is also expected to emerge, providing additional upward momentum. If the $370 threshold is surpassed, the next target will probably be the resistance level at $400 per share.
The overall recommendation is to buy Tesla stocks when the price reaches $370. Profits are taken at $400. Stop loss is set at $350.
The volume of your open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
