Technical reversal suggests buying TSLA with target of 362.20

Tesla stock (TSLA) rose almost 12%, posting its largest one-day gain since early November. The gain allowed to partially recover losses after a recent sharp drop. It was driven by the market optimism about a possible easing of US tariffs. 

US President Donald Trump announced his plans to impose duties on automobile imports, but he added that many countries may get breaks. However, the details were not provided. The comments fueled investor interest in tech stocks amid hopes of softer tariff policy. 

From the technical point of view, the TSLA stock price broke out of the descending channel on the H4 timeframe. The channel was formed during the development of the third wave. Descending wave structure occurred on December 18, 2024. After breaking the top of the first wave at 373.30, the third wave intensified the downward momentum by breaking the level of 200 on the Fibonacci grid and fully recovering its value. During yesterday's session, there was a break of the trend resistance of the third wave. It became a signal of the fourth wave beginning. Trading was accompanied by a significant price gap, confirming a change in the technical picture.

On the H4 chart, after reaching a low of 217.95, the price formed a series of upward candlesticks with small bodies and long wicks. These are signs of bullish engulfing and indecision candlesticks (Doji candlesticks), which often precede a reversal. Besides, the resistance breakdown was accompanied by a gap and a strong candlestick without a wick, indicating the strength of buyers.

The Moving Average of Oscillator indicator (settings 12, 26, 9) shows a growing histogram. The signal line crossing from bottom to top confirms the trend change.

The pattern is consistent with the recovery within the uptrend with the formation of a three-wave structure.

Short-term prospects for TSLA stock prices suggest buying with the target of 362.20. Part of the profit should be taken near the level of 303.00. A Stop loss could be set at 212.50.

Since the bullish scenario is short-term, the trading volume should not exceed 2% of your total balance to reduce risks.