Tesla, Inc. (NASDAQ:TSLA) believes this new vehicle will sell in even higher volumes than the Model 3

Tesla, Inc. (NASDAQ:TSLA) believes this new vehicle will sell in even higher volumes than the Model 3

Tesla, Inc. (NASDAQ:TSLA) believes this new vehicle will sell in even higher volumes than the Model 3

Now that Tesla (NASDAQ:TSLA) is finally selling its Model 3 in mass-market volumes and at its long-awaited $35,000 starting price, the company is moving on to its next big product: its Model Y SUV. Tesla CEO Elon Musk said last week that the company would unveil the vehicle on March 14, a day earlier than a date the CEO provided investors in May of last year. 

Tesla impressively expects Model Y production and demand to trend higher than the Model 3 — and the Model 3 is the electric-car maker’s highest-volume vehicle yet. Investors, therefore, will be watching the event closely.

Tesla’s Model Y unveiling

“Model Y unveil event on March 14 at LA Design Studio,” Musk announced on Twitter last week. On the company’s website, Tesla says it will livestream the unveiling at 8 p.m. PDT.

Ahead of the event, details are scant. But Musk did provide a few tidbits in a tweet last week. “Model Y, being an SUV, is about 10% bigger than Model 3, so will cost about 10% more & have slightly less range for same battery,” the CEO said.

In other words, this will be meaningfully smaller and cheaper than Tesla’s current SUV: the Model X.

With the Model 3 priced at $35,000, the Model Y’s starting price will likely be about $38,500. But Tesla will likely introduce higher-priced versions of the vehicle before it brings to market the base model, just as it did with the Model 3.

Can the Model Y live up to the hype?

Tesla has enormous expectations for its Model Y. Citing the fact that the midsized SUV segment is the most popular vehicle type in many of the major markets Tesla operates in, Musk believes the Model Y will be produced in higher volumes than the Model 3, he said during the company’s fourth-quarter earnings call.

In addition, Musk expects significant synergies from building the Model Y on the Model 3 platform. “Since Model Y will be built on the Model 3 platform and is designed to share about 75% of its components with Model 3,” Tesla explained in its fourth-quarter shareholder letter, “the cost of the Model Y production line should be substantially lower than the Model 3 line in Fremont, and the production ramp should also be faster.”

In the meantime, investors still have doubts about Tesla’s ability to increase Model 3 production and demand to its target 500,000-units-per-year level. Recent price cuts have prompted concerns about demand for Tesla’s vehicles. While the electric-car maker has always planned to lower Model 3 prices in order to hit its target $35,000 starting price for the vehicle, aggressive price cuts to all of its models and a workforce reduction announced earlier this year have some investors worried that demand isn’t living up to the company’s expectations.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 310.65.

The projected upper bound is: 319.89.

The projected lower bound is: 256.23.

The projected closing price is: 288.06.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.

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 79.7855. This is not an overbought or oversold reading. The last signal was a buy 3 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 45.30. 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 126 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 -24. This is not a topping or bottoming area. The last signal was a buy 3 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 sell 7 period(s) ago.

Rex Takasugi – TD Profile

TESLA INC closed up 5.600 at 288.960. Volume was 12% below average (neutral) and Bollinger Bands were 28% narrower than normal.

Open High Low Close Volume___
283.900 291.990 282.700 288.960 6,844,719

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 287.68 308.50 316.44
Volatility: 62 64 75
Volume: 11,963,232 8,392,498 9,306,612

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 is currently 8.7% below its 200-period moving average and is in an downward trend. Volatility is 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 15 periods.

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