Tesla, Inc. (NASDAQ:TSLA) receives a stamp of approval from S&P Global Ratings

Tesla, Inc. (NASDAQ:TSLA) receives a stamp of approval from S&P Global Ratings

Tesla, Inc. (NASDAQ:TSLA) receives a stamp of approval from S&P Global Ratings

Tesla stock (NASDAQ:TSLA) received a stamp of approval from S&P Global Ratings on Wednesday, with the firm revising its outlook on the electric car maker’s bonds from “Negative” to “Positive.” The revised outlook came as a result of Tesla’s stronger-than-expected cash flow and recent debt reduction.

With this change in mind, a potential credit upgrade for Tesla might be in line for the near future. Interestingly, S&P opted to bypass the “Stable” view in between its “Negative” and “Positive” ratings on the “increased likelihood” that Tesla will maintain a high demand for its products and achieve better manufacturing efficiencies.

“The positive outlook reflects an increased likelihood that Tesla’s credit metrics will improve more than our base-case projection because of higher demand and manufacturing-related efficiencies,” S&P Global said.

Tesla currently has a B- rating from the S&P Global Ratings since the firm initially assigned a grade to the electric car maker back in June 2015. Amidst Tesla’s struggles with its manufacturing ramps for the Model X and Model 3, the company’s ratings have mostly been subject to a “Negative” outlook. This was due to the company’s profitability and manufacturing challenges.

These challenges appear to have been addressed by the electric car maker, at least to some degree, as evidenced by its strong Q3 2019 results. During the third quarter, Tesla was able to return to profitability, delivering and producing a record number of cars. With its Q3 2019 results, Tesla was able to prove that it could turn a profit even as it pushes the Model 3 to market, a vehicle that is notably more affordable compared to the flagship Model S and Model X.

So far, Tesla stock has lost about 3% year-to-date. This contrasts with the S&P 500’s gains of 23% and the Dow Jones Industrial Average’s 18% increase.

After struggling for the most part of the year following a challenging Q1 and Q2, Tesla is poised to make headway this fourth quarter. This month alone, Tesla appears ready to begin operations at Gigafactory 3 in Shanghai, which would allow the company to tap into the local Chinese EV market without the additional weight of import tariffs. Tesla will also be unveiling its latest vehicle, Elon Musk’s “Cybertruck” pickup, on November 21 at Hawthorne, CA.

It remains to be seen if Tesla can sustain the momentum it caught following the release of its Q3 2019 earnings report. Yet, much to most of the dismay of the company’s critics and skeptics, it appears that things may now be looking up for the electric car maker.

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 273.89.

The projected upper bound is: 365.20.

The projected lower bound is: 310.68.

The projected closing price is: 337.94.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white 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.

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 80.6255. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 78.91. 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 74 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 90. This is not a topping or bottoming area. The last signal was a sell 6 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 20 period(s) ago.

Rex Takasugi – TD Profile

TESLA INC closed up 8.960 at 335.540. Volume was 78% above average (neutral) and Bollinger Bands were 171% wider than normal.

Open     High      Low     Close     Volume___
329.140 341.500 328.020 335.540 14,467,348
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 321.21 258.58 253.30
Volatility: 60 64 59
Volume: 12,079,208 8,614,314 9,312,369

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 32.5% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 42 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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