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Where to for Tesla share price as market cap again exceeds $1 trillion?


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Tesla shares continue to surge higher as Elon Musk opens delayed €5 billion factory in Germany.

BG_Tesla_elon_musk.jpgSource: Bloomberg
 Axel Rudolph | Market Analyst, London | Publication date: Friday 25 March 2022 

Tesla’s share price (TSLA) has had a bumpy ride of late, falling by some 40% from its early January high at $1,212.30 but rallying by close to 50% from its $691.69 February low as Elon Musk opened his delayed €5 billion ‘Gigafactory’ near Berlin earlier this week.

The plant was delayed by eight months following local authority licensing problems but now constitutes Tesla’s first European hub and represents the biggest investment in a German car plant in decades. At full capacity, the factory will produce half a million cars annually, more than the 450,000 electric vehicles that German rival Volkswagen sold globally in 2021. It will also produce batteries at an annual rate of 50 gigawatt hours (GWh), more than any other German plant.

Tesla has built millions of electric cars while rapidly bringing down production costs. The company seems to be on track to release its full self-driving computer (FSD) which is supposed to be “10 times safer than manual via massive fleet learning and will enable your car to make money for you when you aren’t using it,” before year-end.

With the production of the CyberTruck and Semi to begin next year, Tesla is well on its way to reach its 20 million vehicle target by 2030. Despite the company’s massive growth, the electric automaker currently accounts for just around 1% of the global vehicle market. The limiting factor for Tesla, and all electric car manufacturers for that matter, are the bottlenecks in the mining of rare earth minerals such as cobalt, copper, lithium and nickel which are required for battery production.

Where to next for the Tesla share price?

Tesla stock has seen a stratospheric surge in its share price by some +35% over the past eight straight days and is now trading at overbought levels last seen in early January on the 9-day Relative Strength Index (RSI).

At least a short-term retracement lower may soon be seen but it is to be viewed as an opportunity to enter a long trade since the recent bullish reversal likley has further to go.

The area between the February high at $947.35 and the 55-day simple moving average (SMA) at $909.79 represents a support area, together with the December trough and early March high at $889.31 to $886.25.

While the next lower - the 200-day SMA at $859.65 - underpins, the share price is expected to continue its ascent towards the 2021 to 2022 resistance line at $1,164 and eventually to the November and January peaks at $1,212.30 to $1,247.34 and above.

This is because the decline from the share’s all-time high at $1,247.34 looks to be corrective since it can be sub-divided into three distinct Elliott waves - A, B, and C - meaning the long-term uptrend is intact and new all-time highs are likely to be hit this year.

25032022_TSLA-Weekly.pngSource: ProRealTime
25032022_TSLA-Daily.pngSource: ProRealTime
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