With news breaking that Tesla (NASDAQ:TSLA) will be included on the S&P 500 index, shares of the electric-car maker surged in after-hours trading on Monday, rising more than 14% at one point.
Many funds that model holdings based on the S&P 500 will have to pick up shares of the electric-car maker. Investors are likely speculating that demand for shares in the coming months will exceed supply as funds allocate more capital to Tesla stock.
While the growth stock’s big gain following this news is notable, many individual investors are probably wondering if now’s a good time to buy Tesla stock.
Though 2020 has been challenging for many companies, it’s been a blockbuster success for Tesla. The company recently reported its fifth consecutive quarter of profits, and its top and bottom lines are surging. With such staggering momentum even amid a pandemic, shares of the electric-car maker have skyrocketed. Tesla now has a market capitalization of about $400 billion, up from $63 billion one year ago.
With Tesla shares surging nearly 500% over the past year, the automaker will be among the top 10 most valuable companies in the S&P 500. Since the S&P 500 index is market-cap weighted, the index and other funds that mimic the index will need to build a substantial position in the stock.
S&P Global aims for the S&P 500 index to own Tesla stock before market trading on Monday, Dec. 21.
Tesla, Inc., formerly Tesla Motors, Inc., designs, develops, manufactures and sells fully electric vehicles, and energy storage systems, as well as installs, operates and maintains solar and energy storage products.
The Company operates through two segments: Automotive, and Energy generation and storage.
The Automotive segment includes the design, development, manufacturing, and sales of electric vehicles.
The Energy generation and storage segment includes the design, manufacture, installation, and sale or lease of stationary energy storage products and solar energy systems to residential and commercial customers, or sale of electricity generated by its solar energy systems to customers.
The Company produces and distributes two fully electric vehicles, the Model S sedan and the Model X sport utility vehicle (SUV). It also offers Model 3, a sedan designed for the mass market.
It develops energy storage products for use in homes, commercial facilities and utility sites.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 494.58.
The projected lower bound is: 393.10.
The projected closing price is: 443.84.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 5 rising windows in the last 50 candles–this makes the current rising window even more bullish.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 44.8462. This is not an overbought or oversold reading. The last signal was a sell 6 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 57.65. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 53 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 162.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 7 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 0 period(s) ago.
Rex Takasugi – TD Profile
TESLA INC closed up 33.520 at 441.610. Volume was 100% below average (consolidating) and Bollinger Bands were 59% narrower than normal.
Open High Low Close Volume 460.170 462.000 433.010 441.610 220,790
Technical Outlook Short Term: Neutral Intermediate Term: Bearish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 420.77 420.72 262.41 Volatility: 59 79 111 Volume: 23,156,884 47,322,460 74,004,688
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
TESLA INC gapped up today (bullish) on light volume. Possibility of a Common Gap which usually coincides with a lack of interest in the security. Common Gaps are fairly irrelevent for forecasting purposes. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
TESLA INC is currently 68.3% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of TSLA.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on TSLA.O and have had this outlook for the last 12 periods.
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