Trade of the week: long Tesla
Explore our first trade of 2025 as Tesla shows potential for new highs, driven by technical analysis and strategic market positioning.
Our first trade of 2025
Hello and welcome to this year's first "Trade of the Week" on Monday, 6 January 2025. Our goal for 2025 is to improve upon last year's performance, which saw a 31% increase, while continuing to risk 2% of capital per trade. This disciplined approach remains a cornerstone of our strategy for the new year. Our first trade focus is on Telstra.
Tesla's current market position
The Tesla share price is currently trading around $416, having risen from last week's low of $373.30 on this Daily Financial Bet (DFB). This level serves as a critical support, marking a "line in the sand." As long as the price remains above this point, Tesla maintains its uptrend, characterised by a series of higher highs and higher lows. The recent price movements suggest an ABC Elliott wave zigzag correction, indicating the potential for new record highs approaching the $500 mark.
Factors influencing Tesla's performance
For technical reasons, we are going to go long on Tesla. Additionally, Elon Musk's involvement in the new government, led by President Trump, could positively impact Tesla's share price. This political connection has contributed to the substantial increase in Tesla's share price towards the end of last year.
Trading strategy
In executing this trade, it is crucial to establish a stop loss. Our position would likely be invalidated if the price falls below last week's low of $373.30. Therefore, the recommended strategy is to go long now, with a stop loss set beneath this level and an upside target just below the psychological $500 mark.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It 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.
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