We are witnessing the evolution of two industries in a veteran sector: Tesla (TSLA) – Get report It leads the electric vehicle trend as many traditional automaker stocks struggle.
Despite the recent volatility in the group, Tesla, Nio (NIO) – Get report and Nikola (NKLA) – Get report It will continue to trade well despite the rocky world economy caused by the coronavirus.
While Ford (F) – Get report has been recovering thanks to the introduction of its new Bronco, and as General Motors (GM) – Get report and Fiat Chrysler (FCAU) – Get report stocks go up, performances have not been like Tesla’s.
Operators are now tuning in to see if the electric vehicle maker’s shares will continue to hit new highs after Tesla reports earnings after Wednesday’s close.
The company has already delivered better-than-expected delivery results for the second quarter. Can another win serve the bulls with their winnings?
Tesla Stock Trading
Tesla daily stock chart.
Graphic courtesy of Stockcharts.com
Take a moment to see the stellar volatility we’ve seen in this stock. Shares fell 59% from the high in February to the lows in March, sending the bears into a moment of short-lived joy.
I should mention that Tesla is not worth negotiating from a valuation perspective. It has a market capitalization close to $ 300 billion despite not having the fundamentals to back it up. Someday valuation will matter, but that day probably won’t be tomorrow.
Because this action is not tied to traditional fundamentals, instead, let’s look at the price action.
From the March low to the recent high, Tesla’s stock quintupled, surpassing $ 1,795. The stock continues to resist the 10-day moving average as bulls continue to dominate this name.
On the upside, see if Tesla can rotate above the current high near $ 1,795 and stay above that mark.
If he can do it, he puts the 261.8% spread at $ 1,969 at stake, followed by the $ 2,000 level. I know it sounds crazy, but so did the last rally.
On the downside, a move below the 10-day moving average and a two-fold range extension could accelerate selling pressure.
In that case, I would like to see how the stock approaches $ 1,300. There he finds the extension of 161.8% and the 20-day moving average.
It could then force an eventual decline towards the 50-day moving average and the uptrend support (blue line) near $ 1,050. You could also put the breakout zone between $ 900 and $ 1,000 on the table.
With Tesla, operators must go level by level and stay on top of the trend. When it changes, they should too.
Summer tends to be a crucial time for Tesla. Last year was the bottom line. In 2015, 2017 and 2018, it was the best. That doesn’t mean summer 2020 is important, but it’s worth noting.
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