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Tesla’s share price has bounced from a multi-month low as a number of positive fundamental developments has caused a sudden price reversal towards the $630.00 resistance area.
Firstly, the major recovery in the value of Bitcoin has finally caused sentiment towards the electric car maker to pick-up. Tesla has $1.5 billion invested in Bitcoin according to its last financial results.
The recent price dip towards the $30,000 level in Bitcoin meant that the electric car maker actually went in the red with its massive BTC holding, which is reported to be at an average purchase price of around $37,500.
Bitcoin is now attempting to recover above its 200-day moving average, and the price of Tesla has risen in tandem. Tesla makes substantial profits from environmental credits, however, if Bitcoin rise back above the $50,000 to $60,000 is it seen as bullish for its stock price, as the company is technically making a huge profit.
News that Tesla has taken the unusual step of paying for chip parts in advance, due to a shortage in rare earth minerals. This has helped put aside fears about future supply shortages for the world’s number one electric car maker.
Legendary investor Michael Burry from the Big Short has recently place a substantial bearish bet against Tesla. Burry took a short position against Tesla due to his belief at the companies adverse fundamentals, which is reported to be around $530 million.
So far no signs of outright capitulation in Tesla’s stock price, making Burry’s bet all the more interesting over the coming weeks, as Tesla has gained nearly $80.00 in value since May 18th.
Tesla Short-term Technical Analysis
According to the four-hour time frame Tesla’s stock price has formed a bullish inverted head and shoulders pattern after rallying to wards the $630.00 price area.
Looking at the overall size of the bullish price a further rally towards the $700.00 level is possible while Tesla’s share price trades above the $630.00 level. A large price gap is also present around the $730.00 level, this could also be a possible bullish target.
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Tesla Medium-term Technical Analysis
According to the daily time frame Tesla’s stock price has formed a bullish double-bottom pattern formation after sellers failed to breach the former key swing low from March this year.
Typically, double-bottom patterns are very bullish so we could see more short-term gains in the value of Tesla’s share price. The April swing-high is the likely target. If bears can break a key former low it is natural they will target a key former swing high.
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