Tesla, Inc. (NASDAQ:TSLA) Model 3s a hit in China

Tesla, Inc. (NASDAQ:TSLA) Model 3s a hit in China

Tesla, Inc. (NASDAQ:TSLA) Model 3s a hit in China

According to fresh estimates by JL Warren Capital, Tesla sales in China should hit around 6,400 vehicles this quarter, with most orders coming in for its most affordable electric vehicle, the Model 3 sedan.

The lowest-priced standard-range version of that car, which sells for 364,000 RMB (around $51,000 today). is a big hit in China already. Orders spiked after Beijing gave Tesla, and dozens of other electric vehicle makers there, a healthy tax break earlier this month. The “purchase tax” exemption lowers the cost of buying a Tesla in China but around 99,000 RMB (about $14,000).

However, Tesla’s Shanghai factory probably won’t be able to make Model 3s in high volumes — meaning 1,000 to 2,000 cars per week — until mid-2020, the investment research firm predicts.

China represents a critical growth market for Tesla, and CEO Elon Musk talked up the company’s plans there on its latest earnings call in January. “We need to bring the Shanghai factory online,” Musk said. “I think that’s the biggest variable for getting to 500,000-plus a year. Our car is just very expensive going into China. We’ve got import duties, we’ve got transport costs, we’ve got higher costs of labor here.”

Musk told investors on that call that Tesla should be able to hit a Model 3 production rate of 1,000 or even 2,000 cars per week in Shanghai by the end of 2019.

After analyzing public records and interviewing with people with firsthand knowledge of Tesla’s “Gigafactory 3,” JL Warren wrote in a note to the firm’s clients:

“Small scale testing is to start in Q4 with meaningful production increases not expected until Q1 and Q2 2020, with the goal of 2,000 units per week in June 2020. Unlike the fully automated process in California, GF3 will be semi-automated, as the local labor cost is still lower than full automation. Due to the nature of semi-automation (including human fatigue, work breaks needed etc) this phase of factory ramp up at the GF3 has a maximum of ~2,000 units per week by mid of 2020, vs. ~5000 units per week in California.”

No cars are expected to come out of Shanghai until November at the earliest, unless they are literally hand-made, and production lines there won’t likely be complete for another two months, the note also said.

Shares of Tesla were down half a point on Wednesday.

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 236.29.

The projected upper bound is: 265.80.

The projected lower bound is: 221.71.

The projected closing price is: 243.76.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 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 46.7114. This is not an overbought or oversold reading. The last signal was a sell 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 59.95. 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 38 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 75. This is not a topping or bottoming area. The last signal was a sell 2 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 12 period(s) ago.

Rex Takasugi – TD Profile

TESLA INC closed down -1.300 at 243.490. Volume was 53% below average (consolidating) and Bollinger Bands were 5% narrower than normal.

Open     High      Low     Close     Volume___
245.000 248.169 242.370 243.490 4,228,103
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 239.36 234.88 265.44
Volatility: 37 59 61
Volume: 5,811,932 7,037,769 9,005,678

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 8.3% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of TSLA.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on TSLA.O and have had this outlook for the last 6 periods.

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