Tesla, Inc. (NASDAQ:TSLA) stock extends rally, up 60% in the past seven days
Tesla stock rallied Tuesday as some investors bet that the Silicon Valley car maker is better equipped than most companies to weather the broadside dealt by the coronavirus pandemic.
Shares of Tesla (TSLA) were poised to end at their highest in nearly six weeks and on a winning streak extended to a seventh trading day. The shares are up nearly 60% in that period, their best seven-day stretch since 2013. They were the top performer on the Nasdaq 100 on Tuesday.
The stock is down 21% from its all-time closing high of $917.42 on Feb. 19.
The fuel for Tuesday’s rally came from an upgrade from analysts at Credit Suisse, who said Tesla had “more edge” in the transition to electric vehicles.
The “coronavirus disruption will make it more difficult for legacy auto makers to balance the long-term shift to EV in the face of near-term cycle disruption,” the Credit Suisse analysts, led by Dan Levy, said.
Despite the headwinds from the pandemic and near-term weakness to sales of electric vehicles, “the longer-term commitment to electrification will remain intact,” they said.
They upgraded the stock to their equivalent of hold from sell and upped their price target to $580 from $415, implying a 21% downside to Tuesday’s price.
Tesla last week reported first-quarter deliveries that were higher than many analysts had expected, igniting the rally.
The company has sought rent reductions for its service centers and stores amid the outbreak and has cut salaries and furloughed workers unable to work from home. Its main auto-making factory in Fremont, Calif., has been closed since late March.
It the near term, however, Tesla may face risks including softer demand in the second quarter and possible supply shortages if the shutdown lasts until June. The analysts estimated that the Fremont shutdown is driving about $300 million a week in cash burn.
Tesla earlier this month reported first-quarter deliveries that were very close or above several investment banks’ expectations. The company kept silent on its previous goal to sell more than half a million cars in 2020.
The Credit Suisse analysts said they expect Tesla to sell about 400,000 vehicles this year, down form their previous expectation around 550,000.
Tesla shares have gained 174% in the past 12 months, contrasting with losses around 3% for the S&P 500 index. (SPX).
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 879.44.
The projected lower bound is: 578.21.
The projected closing price is: 728.83.
A black body occurred (because prices closed lower 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 22 white candles and 28 black candles for a net of 6 black candles.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 90.3425. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 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 67.19. 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 18 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 194.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 17 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 13 period(s) ago.
Rex Takasugi – TD Profile
TESLA INC closed up 19.940 at 729.830. Volume was 26% above average (neutral) and Bollinger Bands were 28% wider than normal.
Open High Low Close Volume___
742.000 753.130 710.000 729.830 23,577,000
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 569.02 647.24 400.49
Volatility: 117 155 97
Volume: 19,153,026 20,777,402 12,824,243
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.
TESLA INC is currently 82.2% above 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 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 1 periods.
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