Tesla Shares Surge as Morgan Stanley Names EV Maker Top U.S. Automaker Pick

Tesla shares soared 5.6% to $232.10 on July 29 after Morgan Stanley named it the top U.S. automaker, highlighting its energy business potential.

Morgan Stanley Names Tesla Top U.S. Automaker, Boosting Shares Amid Focus on Energy Business and EV Credits

Morgan Stanley replaced Ford as its top U.S. automaker choice on July 29, which resulted in a surge in Tesla (TSLA) shares. The investment bank emphasized the company's energy business, contending that it could eventually surpass the value of its vehicle business as investors prefer companies that address climate-related issues.

The bank also noted that Tesla could increase its revenue from zero-emission vehicle credits as traditional manufacturers reduce their EV production plans in response to declining demand and heightened competition within the industry.

The most recent in a string of significant movements this month, Tesla shares increased by 5.6% to $232.10 on July 29. The stock began the month at $200 and rose by 37% by July 11 on the back of optimism regarding higher-than-anticipated vehicle delivery figures. Following a disappointing earnings report and a broader tech sector selloff, the stock subsequently relinquished a significant portion of its previous gains by the last week.

In the following section, Investopedia examines the EV manufacturer's chart in greater detail and employs technical analysis to identify critical price levels that may be relevant as the company navigates the future.

Tesla Shares Show Bullish Trends with Golden Cross and Key Support Level Holding Firm

Earlier this month, Tesla shares broke above a descending channel on above-average volume. However, they have since retraced to the pattern's upper trendline, which could transform the area from prior resistance to future support.

Investors have defended this level in recent trading sessions, which implies that the present pullback may have reached its conclusion.

Additionally, during the July 29 trading session, the 50-day moving average (MA) surpassed the 200-day MA, resulting in a golden cross, a bullish chart pattern indicating the commencement of a new uptrend.

Key Resistance Levels for Tesla Shares: $300, $384, and All-Time High Pose Selling Pressure Risks
Investors should observe three critical regions on the chart where Tesla shares may encounter overhead selling pressure if the price continues to rise.

The chart shows a resistance level of approximately $300, and market participants may be inclined to take profits near a multi-year horizontal line connecting numerous peaks and troughs from December 2021 to July of the previous year.

Further upward movement could propel the stock to the $384 region. This may draw sellers close to the April 2022 swing high established during the initial phase of the stock's decline between November 2021 and January 2023. A bar pattern extracts the two bullish movements in the stock from January to July of last year and positions them from the April swing low, projecting a target just below this level. This is an intriguing development.

Ultimately, if Tesla shares break above their all-time high (ATH) established in early November 2021, they may encounter substantial resistance. A move of this nature would result in a nearly 80% increase from the closing price on July 29.