Tesla stock rebounds on descending channel after touching 28-month lows.
Tesla’s stock price has been developing within a descending channel over the last five months and during the previous period, it challenged the return line once again. Also, the stock recorded a fresh 28-month low of 197.88.
Looking at the short-term momentum indicators, they paint a cautiously positive picture. The RSI seems headed for a test of its 30 level as it is turning higher, while the stochastic oscillator posted a bullish cross within the %K and %D lines in the oversold zone, suggesting some gains.
In case of another wave of declines in the market, sellers could encounter their first obstacle near the 178.50 support, identified by the troughs on November 2016.
On the other hand, if buyers continue to have control after the rebound on the return line, resistance to advances may be found near the 215.00 level before meeting the 230.55 level. A bullish violation would turn the focus to the 23.6% Fibonacci retracement level of the bearish rally from 379.00 to 194.88 around 238.50.
In brief, as long as price action remains in the descending channel the long-term outlook would be strongly bearish. In the short-term, only a break above the 23.6% Fibonacci can change the current view.
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