Tesla surged nearly 20% and Alibaba jumped 8% last week, what to expect next?

The global equity market shrugged off the panic selloff and snapped a multiple-week string of weekly disappointments as broad-based rallies were powered by a solid retail earnings outlook and a slowing inflation report. This sparked hope that a US recession under the tightening monetary policy was avoidable and the silver lining from the recent data suggested that the economy may be more resilient and self-adjustable than the market expected.

Today we are looking at three stocks:

Tesla

The share price for Tesla jumped up nearly 20% during last week’s trading session. The price sank to an 11-month low last week but is now sitting nearly 37% from the level in January. The steep decline was first triggered by the production halt due to the Covid lockdowns in Shanghai as well as supply issues impacting its Austin and Berlin plants. As a result, the EV maker’s earnings outlook for this year is likely to be much darker than previously expected.

Meanwhile, Tesla’s founder and news-maker Elon Musk dropped a bombshell last weekend by mentioning Bill Gates on Twitter, saying that Microsoft’s founder has a short position against Tesla Inc. and that would now need between $1.5 billion and $2 billion to close out.

Based on the daily chart, the price is currently testing the trend line connected from the highs since April. A close above this level would bring the price back on top of $800 and confirm a firmly bull-reversal pattern. In this scenario, $852 will become the next target for the long buyers and on the flip side, a failure to challenge the trend line pressure will make the $724 level be key support as well as a stop-loss indication.

Alibaba

Alibaba Group shares soared last week after reporting better-than-expected revenue growth of 9%, reassuring investors fretting about the economic cost of sweeping lockdowns in China. As one of the most valuable and well-known companies in China, Alibaba has seen its market value erode since 2021 when Beijing launched its multi-round clampdown on the technology sector. As a result, the share price for the e-commerce giant is now only trading at 30% from its peak.

After surging by 8% last week, the price for Alibaba is moving back to its 20-days moving average. However, the long-term trend is yet to change as the weekly chart suggests there are more hurdles to conquer in the near term. A major selling pressure can be anticipated between $99 to $104, a level that combines the trend line pressure and a psychological hurdle. Once close above this level will suggest a short-term change from down to up. On the other side, the level of $82 will be significant support for the price.

AGL Energy

AGL Energy is the first ASX-listed company to make headlines in the new week as the shocking chaos triggered by the termination of a longstanding demerger plan and the stepping down of two top figures. AGL Energy chairman, Peter Botten and CEO Graeme Hunt will step down after the giant electricity supplier abandoned a longstanding plan to split the business in two: an energy retailer (AGL Australia) and a coal-fired electricity generator (Accel Energy). Shareholders were due to vote on the demerger plan on 15 June.

The proposed restructure, which was reported to be rejected by AGL’s biggest shareholder, billionaire Mike Cannon-Brookes sent AGL shares down as much as 4.6% in early trading.

The AGL share price has been moving up at an enviable rate of 44.46% since the beginning of the year. Having established a trend over the past five months, the price now sits at risk of breaking the mid-term support and beginning a reversal that will target the 50-day moving average at $8.24. In this event, the price will target $8.143 as key support.

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