Tesla, Inc. (NASDAQ:TSLA) Exceeds $100 Billion Market Cap in Latest Stock Rally

Tesla, Inc. (NASDAQ:TSLA) Exceeds $100 Billion Market Cap in Latest Stock Rally

Tesla, Inc. (NASDAQ:TSLA) Exceeds $100 Billion Market Cap in Latest Stock Rally

Tesla’s stock reached an all-time high on Wednesday when it opened at $571 per share, hoisting the company over the $100 billion market cap and making it the most valuable U.S. carmaker. Globally it comes in second behind only Toyota.

The market cap is one more milestone in a heady ascent that began in June 2019 and saw the stock’s value increase 230 percent over the next seven months.

Over that span, Tesla opened its $2 billion production facility in Shanghai, started Model 3 deliveries in China, bought land in Germany for a European plant, and added the eye-popping Cybertruck to its upcoming lineup, to name a few of the headline-catching announcements.

Bloomberg reported on Tuesday that Tesla reached a settlement with the state of Michigan that will allow the company to sell cars directly to consumers at company-owned stores. Tesla is still facing similar lawsuits in other states that have banned this kind of vertical integration.

Legal wins and product announcements aside, investor confidence is playing perhaps the biggest role in Tesla’s climb.

Bullish stock analysts have raised their price targets and predict strong numbers in Tesla’s Q4 earnings report, due out on January 29.

“I think they’re going to handily beat numbers and get a pretty strong guidance,” said Dan Ives, managing director of equity research at Wedbush Securities, which raised its price target for Tesla to $550 per stock over the next 12 months with a bull case scenario of $900 per stock.

Ives said the stock’s rapid rise, unusual in automotive industries, has everything to do with the potential of the Chinese market to explode demand in the coming year.

“China could bring 200,000-250,000 units over the next two years,” he said. “That’s really the key to the bull thesis, and not just from a demand perspective but from a supply as well.”

Ives predicts Tesla will produce 150,000 units in China in the coming year alone. So far, the Shanghai facility has produced just under 1,000 customer salable cars, but Tesla said it has a production run rate of 3,000 units per week. Assuming demand rises accordingly, that gets the company pretty close to the level Ives is anticipating.

The widespread embrace of electric vehicles in China and elsewhere has played the biggest role in the stock’s surge, Ives said while comparing the EV boom and rapid adoption to that of the iPhone a decade ago.

“You almost have to think about [Tesla] as a technology company,” he said.

Tesla, however, remains one of the most shorted stocks on Wall Street, and a number of analysts have advised caution in the short-term as Tesla ramps up production.

The company reported $5.4 billion in automotive revenues in the third quarter of 2019 with a total of 97,000 deliveries of Model S, Model X, and Model 3 vehicles. That number jumped to 112,000 deliveries in the fourth quarter, according to an early report out of Tesla.

Technical Indicators

Overall, the bias in prices is: Upwards.

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

By the way, prices are vulnerable to a correction towards 437.20.

The projected upper bound is: 613.14.

The projected lower bound is: 540.67.

The projected closing price is: 576.90.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 31 white candles and 18 black candles for a net of 13 white candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with TESLA INC), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

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 81.3766. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 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 80.37. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 40 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 130.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 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 27 period(s) ago.

Rex Takasugi – TD Profile

TESLA INC closed up 2.640 at 572.200. Volume was 79% above average (neutral) and Bollinger Bands were 135% wider than normal.

Open     High      Low     Close     Volume___
564.250 582.000 555.603 572.200 19,651,042
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 525.37 405.80 282.09
Volatility: 75 51 59
Volume: 21,869,404 12,405,982 10,178,459

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 102.8% above its 200-period moving average and is in an upward 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 moderate flows of volume into TSLA.O (mildly bullish). Our trend forecasting oscillators are currently bullish on TSLA.O and have had this outlook for the last 24 periods. Our momentum oscillator is currently indicating that TSLA.O is currently in an overbought condition. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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