$TSLA · StockCharts TV · 2026-10-28

Now, we're going to start with the chart of Tesla. reminder that of course uh a company like Tesa just reported earnings. Uh and when a company is sitting below its 200 day moving average and then just reports earnings, my question is always will we get enough of an upside boost, an upside catalyst post earnings to push above the 200 day moving average.

And in the example of Tesla after reporting earnings last week, we're finally getting that upside followthrough.

So what do we see on the chart of Tesla and the 200 day moving average? So quick comment on what we just saw this week, right? So going into this week's uh uh this week's action and really going through earnings last week, we saw that uh Tesla had broken below its 200 day moving average back here over the summer had gone well below the 200 day moving average to the eventual low around $300 a share uh toward the end of June.

Then had recovered all the way back up to around 380 385 and that's where we had a number of different resistance levels. Then we get to this point going into um you know sort of toward the end of last week going through earnings where the stock was trading up to the 200 day moving average and trading up to these previous resistance levels.

And as the 200 day moving average is coming down you see how these are all kind of coalescing right around 380 385. This is what we call a confluence of resistance where different technical approaches all kind of line up around the same level.

And what that means for me is when you have a confluence of resistance, a bunch of different indicators or multiple indicators kind of agreeing on the same level, that makes a breakout, a a a valid breakout above that level to be even more important because we we are confirming the bullish reversal with a number of different uh number of different indicators.

So um the stock uh Tesla closed above the 200 day moving average on Monday of this week. Friday, we actually ended down here and had a couple moves up to the 200 day, but never really closed above it.

Finally, Monday, we closed higher. And then Tuesday, today's session, we actually closed all the way above $400 a share up to around 407, which finally, I would say, confirmed a move above the 200 day.

And I would say on any of the charts that I'm going to show you, a break, a one-day break above the 200 day moving average isn't enough. I want to see an additional what we call a follow-through day, an additional move above the 200 day moving average.

Now, what happens next? Well, I would say based on the weight of the evidence, Tesla's pretty bullish because we've closed above the 200 day and then we've had that follow-through day.

And we'll come to this purple line uh here in a second. Uh but note that this time back here at the end of June, we also closed above the 200 day and we had a follow-through day, which looked pretty bullish.

But the immediate next day, we closed back below it. So, what I often think about is the 200 day is kind of in in the chart like this is the is the sort of maybe initial entry point.

It's certainly the level that we're following. That follow-through day confirms that it's an uptrend phase, but any close back below the 200 day, I would say negates the breakout.

So, on something like the 200 day moving average, that's my signal, but it also serves as an initial stop because my thesis here is we're breaking out above the 200 day. I think there's further upside potential.

And one of the ways to tell immediately that that thesis is wrong is if we immediately rotate back below the 200 day. That's what told us here that this was not a good breakout and that we're probably going to have a retrenchment below the 200 day which we absolutely did going into the uh into the July lows.

Here I'm using a simple trend line analysis. This purple trend line is taking the major high in December of 2025, connecting that to some uh swing highs in May. You can see that lines up pretty well to the um high in early July.

That lines up to basically Monday's high this week. And then Tuesday again we get the, you know, a confirmed break above that uh trend line. So trend lines for me are not really a trading system.

It's not the most important tool that I use as a as a um you know as a as a trading mechanism, but I have found trend lines to be incredibly valuable as a visual representation of the trend.

Right? I like drawing trend lines as sort of an ongoing conversation I'm having with the chart just to recognize key levels, key trends, key patterns, the slope of a of a decline, which is what we're noting here over the last uh 12 months.

And then when the price breaks above the trend line, you know, for me that's not necessarily a trading signal, but it certainly suggests that the trend as I've recognized it is now changing, right?

Because if the trend is still in place, we would probably keep testing that trend line and and we keep going and going. But when that trend line is finally broken, that just tells me maybe something's new, something's different, and I want to revisit it.

So, it's worth noting here that when we close above the 200 day moving average and then continue above this trend line this week, that means not only are we breaking above the 200 day, breaking above the long-term barometer, but I'm also getting this sort of larger signal that the trend is starting to shift and that we're breaking above that long-term trend line that I've had on my chart.

Also, note the RSI has broken above 60 this week. And that's another way we can confirm a break above the 200 day moving average. When I see a nice breakout in price, for that to be a believable breakout, if I want to trust that there might be further upside potential, I want the breakout to be confirmed by stronger momentum.

Look at how the peaks in July and in September and then into October, the RSI never really got above 60. So, the whole range of the indicator is not in the bullish range. Bullish range means we're moving above 60 on breakouts. that all of a sudden starts to change here this week as we break higher on stronger momentum.

The RSI indicator here is based on a look back period and then it's the average upday versus the average down day. So if the RSI is pushing above 60 up towards 70 plus that means that the up days are a lot stronger and that's exactly what I want to see during a breakout situation right I want to see a lot of optimism I want to see an influx of demand I want to see the momentum improving and the RSI pushing above 60 is one of those great uh indications of that improving momentum.

Now finally at the bottom we can see that the relative performance is starting to break out as well. Well, this tells me that Tesla is outperforming the S&P and uh and that breakout uh confirms all of the above.

So, in this case, I just wanted to illustrate Tesla's a really good example of a stock having spent a lot of time below the 200 day moving average. Paul Tudtor Jones famously said nothing good happens below the 200 day.

So, I've learned to patiently wait for that breakout above the 200 day moving average. And based on what we've illustrated here with the confluence of resistance, the break above trend line resistance, the follow-through day, the improved momentum, the improved relative strength, I can't guarantee that Tesla's going to go up tomorrow.

But I can tell you that based on my assessment of the conditions here, that that breakout seems to be a good one. And the type of breakout that I would probably uh assume goes further up until the price tells me otherwise. Innocent until proven guilty, as I like to say.