Unlike many large-cap growth stocks, Tesla hasn’t been making new highs lately. In fact, it’s been trapped in a fairly wide trading range between roughly $290 and $370 since May. Because of that, it has been largely absent from the financial headlines. This is understandable given the AI-related technology stocks that continue to set new records. But we shouldn’t ignore Tesla. As we know, the stock has a tendency to capitalize on buy-side momentum when demand finally finds its way back — and that could be happening again soon. Here’s why. Even though the stock has been stuck in a trading range, it is doing a good job bouncing back after its earnings-related gap lower in July. Since that low, Tesla is up about 20%. More importantly, that comeback may be part of a potentially bullish technical chart formation. On the weekly chart, the stock resembles a multi-month cup-and-handle pattern. Of course, this bullish structure won’t be confirmed unless and until $370 is recaptured — but if that happens, it could lead to a significant upside move. Why do we take this seriously? Because we’ve seen this before — multiple times over the years, but most notably since 2023. Two of the biggest bullish chart patterns since then stand out: The first developed from January 2023, with a breakout in May. That move quickly met its target by July before the stock sold off again. However, that “routine” selloff turned out to be the early stage of an even larger bullish setup. The second iteration took much longer to play out, but when the breakout finally happened in late 2024, it ignited a forceful rally that easily hit the $400 target. That continued until the year’s blow-off top. That brings us to today. The ensuing downturn was extreme, with Tesla bottoming this past March — well ahead of the broader market. It was notable to see the stock hold near that low during the market-wide April waterfall decline that dragged so many other names lower. Needless to say, then, the stock is now working on yet another long-term bullish pattern, which is close to being triggered. Looking at Tesla from a slightly different angle, we can see that as the multi-month trading range has developed, the stock’s key moving averages — the 20-, 50- and 200-day lines — have now converged closely together. While the moving averages have been largely directionless in recent months, the stock has been doing a good job of using this cluster of lines as support. That’s a sharp contrast to what happened at the start of the year, when Tesla sliced through the 20- and 50-day lines and then struggled to climb back above them. Now, however, with the potential bullish pattern in play and the stock trading above all three moving averages — each of which has begun turning higher — the technical backdrop looks far more constructive. Adding to the positive tone, the 14-day RSI (bottom panel) has been holding in the upper half of its range, most recently bouncing off the 50 level. That, too, is a supportive development that reinforces the potential for further upside. Lastly, if Tesla can eventually break out, it would have a good chance of showing relative strength versus its “Mag Seven” counterparts, pictured here in the form of the MAGS ETF. What’s interesting is that this setup looks similar to 2024, when the relative line first made a key low (shown in blue). The real outperformance, however, began after the Tesla/MAGS ratio formed a higher low (shown in green). That was the turning point where the real relative strength kicked in. We may be seeing a repeat of that behavior now: a key pivot low in March, followed by what could be another higher low over the past few months. If that pattern plays out again — this time with a breakout — the relative line could make a very substantial move to the upside. — Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: Cappelleri owns Tesla stock. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . ) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
