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Should you buy Tesla stock while trading above $1,000?

Tesla bounces from $1,000 as investors buy the dip. The technical picture looks bullish while the price holds above $1,000, and competitors admit Tesla sets the benchmark for EVs. 

During the COVID-19 pandemic, one company diverged from all others – Tesla. Its share price made new record-highs in 2021, trading close to the round $1,000 level, and then blew resistance away.

It traded above $1,200 before Elon Musk, its charismatic CEO, announced that he would sell shares to pay taxes due in 2022. The announcement triggered a correction, but the stock price still holds above the critical support area.

Tesla's stock price rally looks overextended for a company that does not pay a dividend and trades at sky-high valuations. However, both technical and fundamental factors favor the upside.

Tesla stock remains bullish while above $1,000

From left to right, the daily chart below shows the price action in the past year. Tesla bulls pushed against resistance seen at $900, but the market failed at its first attempt higher.

However, on its move lower, the stock has only built energy for another attempt at resistance. The second time, in late 2021, it blew resistance away, triggering stops above $1,000 and not stopping until trading above $1,200.

Currently, the stock price has strong support at $900 (i.e., previous resistance) and strong resistance at $1,200. As such, the $1,000 round number became a pivotal level and, while above, Tesla's stock price remains bullish.

VW's CEO admits Tesla is the EV benchmark today

For all Tesla's detractors, one article published by CNBC in late 2021 revealed the fact that competitors agree that Tesla sets the benchmark in the EVs market. Herbert Diess, Volkswagen's CEO, was out with some praising words regarding Tesla.

First, he pointed out that Tesla builds the car around its software, and not the other way around. As such, Tesla sets the standard in software – competitors must follow.

Second, Tesla's productivity outpaces Volkswagen's productivity. For instance, Tesla wants to build 90 cars/hour, much more than Volkswagen achieves at its factory in Zwickau.

Finally, Tesla's brand. The company's Model 3 was the best-selling car in Europe last September, without Tesla building any cars on the old continent.

To sum up, Tesla sets the benchmark in the EVs market, and competitors are well aware of it. Therefore, the more investors believe Tesla will succeed with its long-term plans, the higher the stock price.

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