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Tesla Stock Could Be Ready for a Technical Breakout

Tesla shares are trading in a technical pattern and are ready to break out from consolidation.

TSLA – Daily Chart

TSLA – Daily Chart

TSLA stock trades in a triangle formation, which has tightened and looks ready to break out. Support for a lower move costs $160.68, and the higher resistance is $200-205. 

Elon Musk was under some pressure again after reports that he diverted Nvidia AI chips from Tesla to X. 

CNBC reviewed an internal Nvidia memo from December: ” Elon prioritises X H100 GPU cluster deployment at X versus Tesla by redirecting 12K of shipped H100 GPUs originally slated for Tesla to X instead.” 

CNBC also said the change delayed Tesla’s delivery of over $500 million in processors by months. Tesla CEO Musk explained in a post on X that the swap of AI chip shipments happened because Tesla had no place to store and use the chips when the move was made. 

“Tesla had no place to send the Nvidia chips to turn them on, so they would have just sat in a warehouse,” Musk wrote.  

He added that Tesla would soon use Nvidia’s AI chips to train its Full-Self-Driving (FSD) software at its Gigafactory in Austin, Texas. “The south extension of Giga Texas is almost complete. This will house 50k H100s for FSD training.” 

Tesla shareholders are set to vote on June 13 to reinstate Musk’s $56 billion pay package, which a Delaware court voided. Musk previously said he would only build AI products at Tesla if given 25% voting control. 

“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control… Unless that is the case, I would prefer to build products outside of Tesla,” Musk said in January. 

The price of Tesla looks set for a breakout, and the company’s following delivery figures could exacerbate the direction. In the first quarter, Tesla produced over 433,000 vehicles and delivered around 387,000. 

Sales are still slowing in China. In May, they dropped 6.6% from a year earlier to 72,573 units, extending a year-on-year decline for the second month, according to data this week from the China Passenger Car Association (CPCA).

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.

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