Tesla, Inc. (NASDAQ:TSLA) shares remain on a historic rally post earnings

Tesla, Inc. (NASDAQ:TSLA) shares remain on a historic rally post earnings

Tesla, Inc. (NASDAQ:TSLA) shares remain on a historic rally post earnings

The average investor has made a smart trade on Tesla (TSLA), for now.

“What we saw as Tesla hit all-time highs [last week] — as it looked like there was money flowing in from pretty much everywhere — we saw our clients selling and taking profits. So last week, our clients were net sellers of Tesla as it was charging up to all-time highs. As it got above $900, we saw a meaningful spike in selling,” said TD Ameritrade strategist Shawn Cruz on Yahoo Finance’s The First Trade.

In case you have been living under a rock, Tesla has enjoyed one heck of a February.

Following a second straight quarter of profits and an upbeat earnings call by CEO Elon Musk, Tesla’s stock exploded to an all-time high of $968.99 last week. Pros say the massive move higher was spurred by epic amounts of short covering (thanks to the profitable quarter and a quick ramp at a new factory in China) for a stock that is no stranger to being bet against by traders. While Tesla’s stock has come back down to Earth amid numerous Wall Street analyst downgrades – currently trading around $770 — shares are still up an insane 80% in 2020.

“We are looking for Tesla to trade in the $700 to $800 range unless we get something else that will meaningfully bump it higher or lower,” Cruz said.

That next catalyst for Tesla could very well be its first quarter results, if its last two better than expected quarters are any indication. If Tesla is able to sustain recent demand momentum into 2020, hitting its full-year guidance for 500,000 deliveries could excite investors.

“While Tesla shares remain on a historic rally post earnings, the bull party will likely continue in the near-term as the aggressive trajectory of Giga 3 production and demand out of Shanghai look very strong out of the gates with the potential to see 150k units/demand out of the region over the next year in our opinion. While the coronavirus outbreak is a tragic outbreak and headline, fundamentally it should have a negligible impact on Tesla’s China growth trajectory in our opinion,” writes Wedbush analyst Dan Ives.

Ives has an Outperform rating on Tesla and high-end price target of $1,000. He thinks Tesla will very likely surpass its 500,000 vehicle delivery guidance for this year.

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 556.50.

The projected upper bound is: 887.06.

The projected lower bound is: 679.42.

The projected closing price is: 783.24.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 33 white candles and 16 black candles for a net of 17 white candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 33.4325. This is not an overbought or oversold reading. 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 69.10. 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 4 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 62. This is not a topping or bottoming area. The last signal was a sell 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 buy 40 period(s) ago.

Rex Takasugi – TD Profile

TESLA INC closed up 3.100 at 774.380. Volume was 16% below average (neutral) and Bollinger Bands were 254% wider than normal.

Open     High      Low     Close     Volume___
768.790 783.506 758.000 774.380 11,697,473
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 731.68 496.16 309.94
Volatility: 178 93 71
Volume: 31,286,862 17,361,760 11,262,103

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 149.8% 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 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 37 periods.

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