Stocks of Tesla soared over 40% in January

As Tesla's stock has rebounded recently, some investors are wondering what could happen in the future for the company. Many are appreciating the company's profits for now as being a nice change of pace after going through a tough 2022 as far as the stock price is concerned.

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According to Trade Algo, Tesla's stock price rose by 41 percent in January, in line with a recent report by Trade Algo that further described the jump. During the month of January, the company's shares ended trading at $173.22, up nearly 5.5 percent from January 6, when the shares peaked at $101.81.

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It is worth noting, however, that January 2022 was Tesla's best month since October 2021, when it gained 44 percent, falling to $371.33, its highest opening price before the stock split. It has been suggested that Tesla may need to do this from a technical perspective in order to maintain a positive investor sentiment, as pointed out by CappThesis founder and technical analyst Frank Cappelleri on the chart.

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"It goes without saying that this pace cannot be sustained, but for Tesla [stock] to stand on solid ground in the near future, it must demonstrate it can digest these gains constructively," Cappelleri said. “Specifically, it would be helpful if the stock price paused, formed a bullish pattern, and then broke out again once the bullish pattern was restored. Aside from that, it's a challenge to pursue it over the short term until you learn what works and what doesn't."

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It is important to note that Cappelleri points out that investors often tend to look at the short-term after a big rally rather than to look for more of the same. It can also be especially painful for some people to lose out on money gained so quickly - sometimes causing sell-offs that can stall or slow the momentum of stock rallies for a company that has gained so much a short time ago.

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As noted in Trade Algo, market technicians use chart patterns to gauge general investor sentiment, with the hope of predicting what might happen next by examining chart patterns as indicators of general investor sentiment. John Roque, the market technician at 22V Research who predicted Tesla stock would hit a bottom in January of 2022, predicted in late 2022 that the stock would fall by $100.

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While both Roque and Cappelleri are attempting to view the stock from a technical perspective, they do not neglect to take into account the fundamentals, which are, as Trade Algo claims, ultimately what determines how a stock performs. Despite all the above, Tesla was set to hold its upcoming shareholder meeting on March 1st, which will allow the automaker a chance to share key fundamentals and data points with its investors.

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Currently, Tesla's shares are up 54.23 percent year-to-date, compared to the overall S&P 500 index, up 7.73 percent, and the Nasdaq Composite index, up 14.72 percent. Both are outperforming the S&P 500 index and the Nasdaq Composite index by around a distance of 14 percent.

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Tesla's shares might do well or badly over the coming months and years, of course, but Trade Algo says a bullish sign is the company's recent performance in the first month of the year, especially for investors who invest over the long run.