Tesla, Inc. (NASDAQ:TSLA) stock surges 10%: Here’s what we think is happening

Tesla, Inc. (NASDAQ:TSLA) stock surges 10%: Here’s what we think is happening

Tesla’s (TSLA) stock surged by as much as 10% this morning despite a broader market pullback amid the developing coronavirus pandemic.

Here’s what we think is happening.

The market saw a broad correction over the last month as the coronavirus pandemic has been worsening in several countries, especially in the US.

The S&P 500 crashed more than 30% since February before erasing some of the losses over the last 2 weeks.

Tesla also took a big dive, which was accentuated by the fact that the automaker’s stock was on a several month run that pushed its value to twice as much as its previous all-time high right before the coronavirus crisis.

However, the stock has been recovering at an impressive pace and it’s now up more than 30% since the low of last month:

This morning, Tesla’s stock surged by as much as 10% while the rest of the market was down by more than 1%.

It isn’t clear what prompted such movement in Tesla’s stock, but with the market being closed for a few days, there was a series of news that came out in the last few days that could have helped the stock:

Heffx Opinion

But what I think is really happening is that the market and analysts are starting to look at what the auto market is going to look like post-pandemic and many are starting to see that Tesla might be in a much better situation than other automakers.

In the short term, some automakers who are stuck in longer product cycles appear to be considering delaying some of their EV market launches while Tesla, which is seen as more nimble, seems to be moving forward with its plans.

There’s also the potential for the crisis to benefit Tesla even more in the long-term, which is nice for the company but scary for the pace of electric vehicle adoption.

Some markets, like Europe and China, are considering slowing down their emission standards for the auto industry due to the current crisis, which could encourage companies to slow down their investments in electric vehicles – resulting in lower volume EV programs.

You could argue that traditional automakers were already in a crisis due to the transition to electric cars and now when you had this pandemic on top of it, some of them might not survive.

On the other hand, Tesla is already the final form of what all automakers will be after this transition. Therefore, if it can just survive this crisis, it will be in a much better situation.

I think more people and market movers are starting to realize that.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 809.36.

The projected lower bound is: 492.95.

The projected closing price is: 651.15.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 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 7 rising windows in the last 50 candles–this makes the current rising window even more bullish.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 94.8893. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 4 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 61.12. 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 buy 16 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 228.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 15 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 11 period(s) ago.

Rex Takasugi – TD Profile

TESLA INC closed up 77.950 at 650.950. Volume was 23% above average (neutral) and Bollinger Bands were 7% narrower than normal.

Open     High      Low     Close     Volume___
590.160 652.000 580.530 650.950 22,475,420
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 527.66 647.06 395.52
Volatility: 116 161 96
Volume: 16,714,630 20,953,386 12,619,431

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.

Summary

TESLA INC gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
TESLA INC is currently 64.6% above its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 28 periods.

We invite you to try out any MetaStock product (including Add-Ons) for 30 days. If you are not convinced that it helps you make more accurate, educated trading decisions, just return it to us within the 30 days for a refund of the purchase price. It’s that simple. This policy does not apply to subscriptions.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.
#Elon Musk#inc#investing#nasdaq:tsla#shayne heffernan#Tesla#tesla news#tesla stock#tesla technical analysis#trading