TESLA stock: time to buy?

TESLA stock: time to buy?

The name of which company comes to your mind when you hear the words “controversial” and “successful” at the same time? The answers may differ but there is one in the automotive sector which most of you may think about. Of course, it is Tesla.

Tesla, as well as its well-known CEO Elon Musk, is one of those companies which have made many headlines this year. Apart from multiple scandals connected with Musk’s Twitter account, there has been a lot of news about Tesla itself. The hottest and the most recent is the presentation of the new electric-powered Cybertruck on November 21. The release of the futuristic vehicle not only increased the number of memes on the Internet but also shook the price of Tesla stock.  Indeed, while traders were bullish in anticipation of the event, one incident – a break of Cybertruck’s shatterproof windows – abated investors’ excitement and pulled the stock down a bit.

Despite this small unfortunate happening, the overall sentiment surrounding Tesla remains positive. The analysts say it's a "must-own" stock, raising their price targets. They anticipate the sales of a new truck to impact Tesla’s revenue and margin in the future.  One of the most bullish forecasts belongs to Piper Jeffrey's expert, who expects Tesla shares to rise as high as to $423.

A glimpse into Tesla’s financial data

Looking at the past year for Tesla, we can see that it has been full of ups and downs.  The price of Tesla stock has plunged from January’s highs above $350 to the levels below $170 in June. One of the reasons behind the slide lies in the lower-than-expected earnings reports for the 1st and the 2nd quarter of the year. The weak data was followed by a gloomy picture of the stock market due to the US-China trade uncertainties.

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Sourced by NASDAQ

However, as we know, after rain comes fair weather, and the third reported EPS came out as a great and marvelous surprise for all bulls of Tesla. The earnings-per-share were reported at 1.86 (vs. the forecast of -0.42). As for the revenue, Tesla announced $143 million, therefore defying the negative forecasts. The price of Tesla stock gapped up on the report, soaring towards the $340 level. It even managed to test the $360 resistance level ahead of Cybertruck’s presentation but corrected to the support at $325-330. 

Technical perspective 

For now, the main question for traders remains simple. Do we need to believe the bullish forecasts of analysts? And, most importantly:

Will we see the retest of the December’18 highs?

The answer depends on how good the demand and delivery numbers will be after the new truck is released. The next earnings report will be out in late January and provide us a clearer picture.

 For now, if bulls keep dominating in the market, the key levels will lie at $340 and $360. The downward momentum is limited by the support levels at $325 and $310. After the breakout of these levels, bears may focus on reaching $300.

This kind of scenario excludes any unexpected announces, but as we are talking about Tesla, you should always keep them in mind.

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You can make money on the ups and downs of Tesla stock. For that, you need to open an MT5 account in your FBS personal area, make a deposit, download MetaTrader5 and log in. Good luck in your trading!

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