Wall Avenue liked the Tesla, Inc. TSLA Q2 deliveries report on Tuesday.The inventory is ripping increased, and now many merchants and buyers are questioning how far the rally will go. A easy technical evaluation lesson might supply some perception.Shares are likely to hit resistance round a worth degree that had beforehand been a peak or prime. There’s a logical motive for this. It is due to investor psychology, and it’s why our group of buying and selling specialists have made Tesla our Inventory of the Day.As you’ll be able to see on the chart, the inventory hit resistance across the $263.50 degree in September 2023. After a selloff and reversal, it hit resistance on the similar degree in late December 2023 after which one other selloff adopted.Resistance at a Former Peak?There will be resistance at a worth that was beforehand a peak or prime due to purchaser’s regret. Among the merchants and buyers who buy shares on the prime come to remorse doing so when the worth heads decrease proper after they purchase. They consider they’ve made a mistake.A lot of them determine to promote their positions. However they do not wish to lose cash. Consequently, when the inventory ultimately rallies again as much as the worth they purchased their shares at, they place promote orders. If there are sufficient of those orders positioned on the worth that had been a peak, it may possibly trigger resistance to type on the degree once more.Because of this Tesla hit resistance on the similar worth degree in December because it did in September of final yr. If the shares make it again to ranges round $263.50 there’s a good likelihood there may be resistance there once more.Is Tesla (TSLA) Headed Decrease?Typically when shares cannot break resistance and hold transferring increased, they roll over and head decrease. That is additionally as a result of psychology.Among the buyers and merchants who created the resistance with their promote orders grow to be anxious. They know that the consumers will go to whoever is keen to promote on the lowest worth. As a result of they’re apprehensive about lacking the commerce, they cut back the worth at which they’re keen to promote their shares.Different anxious sellers see this and do the identical factor. And it might lead to a snowball impact that pushes the worth decrease.When utilized accurately, technical evaluation reveals the psychology behind provide and demand. Tesla’s chart clearly illustrates some elementary market rules.Learn Subsequent:Picture created utilizing synthetic intelligence by way of Midjourney.