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Tesla stock is more than 40% above its 50-day moving average.
Sean Gallup / Getty Images
After a short break Wednesday after a 5-day rally that added more than $ 500, or 36%, to the share price, Tesla shares were on the move again, up nearly $ 100, or 5.1% Thursday afternoon .
Shares knocked on the door of $ 2,000. In fact, the new 52-week high for Tesla stock (ticker: TSLA) is $ 1,999.99 – about 1 hour east.
That’s quite a number – $ 2,000 was Wedbush analyst Dan Ives’ best case scenario just weeks ago. His new best-case scenario is $ 2,500.
There is not much news to pinpoint Thursday’s win. Two analysts upgraded shares, but that was last week. Ives increased its price target from $ 1,800 to $ 1,900 per share. That was Monday.
Gary Black, former Bernstein analyst and former CEO of Aegon Asset Management and Janus Capital Group, updated his rating for Tesla on Thursday. He’s a Tesla bull. Its new price target is $ 2,700.
Black is no longer a traditional analyst, but he has 7,200 followers and he makes his estimates public. Black’s 2025 revenue estimate for Tesla is $ 80 per share, up from $ 70.
The Wall Street estimate does not always go out four or five years. There are a few estimates for 2025 revenue. Currently, Street is modeling about $ 40 in revenue per share for that year.
Except for black, Bullish investors may still expect Tesla stock to be added to the S&P 500 and a share split to become effective. Tesla qualified for inclusion in the S&P 500 after reporting another quarterly gain for the second quarter of 2020. And the stock split 5 for 1 at the end of the month.
The supply increases because there are more buyers than sellers. That always has the reason that every asset wins. And it’s as good a reason as any for Thursday’s move.
What’s next is someone’s guess. New full-height – and 52-week highs – can often be a positive sign for traders. They can mean that a stock is broken by resistance levels – if some traders take profit.
On the other hand, Tesla is more than 40% above its 50-day moving average. The supply is being bought in Wall Street parlance. This may be a sign that stocks are responsible for a correction. A correction on an increasing moving average would still leave stocks up north from 250% to date.
That hitting a long time argues for a continuation of the rally, while the overbought state argues for a break – or at least for a while no major moves. Not too helpful. But calling Tesla shares in 2020 has been tough.
The stock is up about 375% year-on-year, pushing the performance of the S&P 500 and Dow Jones Industrial Average over the same span.
The EV shares Barron’s tracks are on average more than 250% up year over year. And more EV companies, such as Li Auto (LI) and Canoo, are entering the market, increasing billions in the process.
Eventually, the stock split and inclusion of S&P 500 will be fully discounted in the Tesla share price. Index funds are probably doing what they can to build positions, whether with direct purchases or call options.
Along the way, the company’s battery technology day in September will be the next big event for Tesla bulls and bears. Investors and analysts want to hear about battery costs and sustainability. A battery that can last one million miles would be a gain and cost falling below $ 100 per kilowatt-hour would be another gain.
No one knows what will happen in September. But it has been a bad idea to bet against Elon Musk in 2020.
Write to Al Root at [email protected]
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