Technical Analysis | Tesla Returns Above $200, Should We Take Profits?

Optimism surrounding Tesla's stock is forming.

Tesla's stock price has once again broken through the $200 level, and investors are wondering whether to take profits, double down, or do nothing.

Tesla breaks $200

Tesla closed above $200 for the first time since the end of March this week.

CappThesis founder and market technical analyst said: "Tesla is now overbought again and has broken through the 200-day moving average."

Overbought situations occur when stock prices rise very quickly and are usually measured by the relative strength index (RSI), which is typically considered overbought at 70 or higher. Tesla's RSI indicator is currently around 70.

In February of this year, Tesla's stock price rose from about $100 to $210 in about five weeks, but failed to break through the 200-day moving average.

However, today, Tesla's stock price is above the 200-day moving average (about $195) and the 50-day moving average (about $180).

Focus on $180 and $140

Katie Stockton, founder of Fairlead Strategies, said that if Tesla's stock price stays above $180, it will be a positive signal.

If the stock cannot stay above the 50-day moving average, investors should focus on the $140 level.

Rick Bensignor, founder of The Bensignor Group, said that if Tesla falls below this level, it will return to the January low of around $102.

In the coming weeks, Tesla will announce its second-quarter delivery and financial results, giving investors and analysts the opportunity to understand demand and profit margins.