Tesla, Inc TSLA was spiking up over 1% higher on Monday after a big bullish day on Friday caused the stock to rise 2.9% off the open and reclaim the 200-day simple moving average (SMA) as support.

The 200-day SMA is an important bellwether. Technical traders and investors consider a stock trading above the level on the daily chart to be in a bull cycle, whereas a stock trading under the 200-day SMA is considered to be in a bear cycle.

The 50-day SMA also plays an important role in technical analysis, especially when paired with the 200-day. When the 50-day SMA crosses below the 200-day SMA, a death cross occurs, whereas when the 50-day SMA crosses above the 200-day, a bullish golden cross takes place.

A death cross occurred on Tesla’s chart in May, which dropped the stock into a long-term bear cycle. In August, Tesla popped up above the 200-day on several occasions, but was unable to hold above the level for any length of time.

When Tesla last attempted to cross above the 200-day on Aug. 24, Aug. 25 and Aug. 26, the stock rejected the area and entered a downtrend that caused Tesla to decline 12% to a Sept. 1 low of $266.15. Tesla tested that low as support again on Sept. 6, which caused the stock to print a double bottom pattern at the level.

In reaction to the bullish double bottom, Tesla rebounded about 10% and on Friday the stock crossed back up above the 200-day SMA.

Traders and investors will be watching to see if Tesla can hold above the level this time and if the stock can remain above the 200-day for a period of time, a golden cross will occur.

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The Tesla Chart: Although Tesla negated its most recent downtrend, the stock has yet to confirm a new uptrend. For an uptrend to confirm on the daily chart, Tesla will need to retrace to print a higher low. Now that Tesla is above the 200-day, the higher low may occur on a back test of that level.

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