Breaking Down the Chart for Tesla, Inc. (TSLA)

Investors have been carefully witnessing the recent activity of Tesla, Inc. (NASDAQ:TSLA) stock. At the end of the day, it’s only a stock’s performance that matters. With this in mind, it’s worth taking a look at the chart to get a sense of where it might be headed in the future.

How has the stock performed recently?

Tesla, Inc. (NASDAQ:TSLA) has been trading in a bearish manner, based on the relative positions of the stock’s 20 and 200 day moving averages. In the last month, the price of TSLA has increased +8.09%. Shares are now up over the past year, outperforming the broad market by -100% and underperformed a peer group of similar companies by -7%. After the latest session, which saw the stock close at a price of $336.41, TSLA sits below its 52-week high.

Momentum indicators

Of course, these surface-level price movements don’t tell us much about the direction that TSLA may be headed in the future. In order to predict this, technical analysts look at momentum indicators, which measure the speed and magnitude of these price movements. The idea is that as momentum slows, it may signal the approach of key support or resistance levels and a reversal of recent trends. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for TSLA is 56.44%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 43.50%, tells a similar story, and suggests that TSLA currently trades in neutral territory.

What do the trading volumes reveal?

Price isn’t the only tool analysts use to forecast future performance. Volume patterns can also reveal some important insights. If, for instance, a stock’s volumes suddenly increase by a significant amount, it’s usually a sign that the level of conviction behind the trade is high. Investors may feel very strongly about the future direction of the stock in question. Tesla, Inc. (TSLA) average trading volume of 5,820,005 during the past month is 12.29% below its average volume over the past year, indicating that investors have been less active than usual in the stock in recent times.

What do the analysts think?

TSLA is currently overvalued by 7.45% relative to the average 1-year price target of $313.09 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 3.00, which implies that analysts are generally neutral in their outlook for TSLA over the next year.

How risky is the stock?

When predicting the future performance for a stock, it’s also important to take into account risk. To do this, analysts often use a stock’s beta, which measures the stock’s volatility relative to the overall market.

Tesla, Inc. (NASDAQ:TSLA) has a beta of 0.91, compared to a beta of 1 for the market, which implies that the stock’s price movements are less extreme than the market as a whole. TSLA therefore has an below average level of market risk. During the past couple of weeks, TSLA average daily volatility was 35.90%, which is -1.83 percentage points higher than the average volatility over the past 100 days.

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