Tesla, Inc. (TSLA) shares rose more than 5.6% on Monday after Elon Musk suggested at the SXSW festival in Austin, Texas, that self-driving technology could become ubiquitous much sooner than expected. In particular, Musk believes that self-driving cars will be able to handle all modes of driving by the end of next year and suggested that his company's AutoPilot technology could prove safer than human drivers within two years.
The breakout higher came despite a temporary suspension in Model 3 production late last month. While the company is targeting 2,500 units per week by the end of the first quarter and 5,000 units per week by the end of the second quarter, the production suspension could result in lower-than-expected deliveries during the first quarter. The positive news is that improvements in automation could make future production numbers more sustainable. (See also: Tesla Suspended Model 3 Production for a Week in Feb: Report.)
From a technical standpoint, the stock rebounded from trendline support on Monday and broke through its 50- and 200-day moving averages before retesting them early Tuesday. The relative strength index (RSI) appears neutral at 51.73 along with the moving average convergence divergence (MACD). These technical indicators provide few hints into future price direction but leave the door open to a swing higher or lower over the intermediate term.
Traders should watch for a rebound from the key moving average support levels to retest upper trendline resistance at around $360.00. If the stock breaks down from these levels, traders should watch for a move to retest lower trendline resistance at around $325.00. A breakdown from these levels could lead to S1 support at $305.22, while a breakout from upper trendline resistance could lead to a move to R1 resistance at $370.45. (For more, see: Tesla Semis Hit the Road With First Cargo.)
Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.