Tesla Stock Breaks Out Toward All-Time Highs

Tesla, Inc. (TSLA​) shares rose more than 3% on Thursday, breaking out from near-term resistance levels at around $370.00. The move comes after Tesla CEO Elon Musk indicated that the company would unveil its semi-truck on Oct. 26. At the same time, The American Trucking Association expressed interest in including trucks in any legislation passed on autonomous vehicle development in a move that could signal the high level of demand.

Morgan Stanley analysts believe that the trucking sector – including companies like Schneider National, Inc. (SNDR​) and Ryder System, Inc. (R) – could benefit from electric vehicles and autonomous driving capabilities. In addition, the analysts believe that Tesla could start taking orders immediately after the event with a $5,000 deposit, which could lead to near-term revenue and an early sign of the level of demand in the market for such products. (See also: Tesla Could Be Biggest Catalyst in Trucking in Decades: Morgan Stanley.)

From a technical standpoint, the stock broke out from trendline resistance at $370.00 to R1 resistance at $380.19. The relative strength index (RSI) has moved closer to overbought territory at 65.04, but the moving average convergence divergence (MACD) experienced a bullish crossover that could signal the start of an uptrend. Traders should maintain a bullish bias on the stock given the recent strength over the past few sessions.

Traders should watch for a breakout from R1 resistance levels at $380.19 to retest prior all-time highs at around $386.99. With RSI levels approaching overbought levels, traders could see some consolidation either before or after the breakout, but the MACD indicator suggests that the stock will continue to move higher. Traders will also be keeping an eye on the company’s next earnings report, which is due out on Oct. 25, 2017. (For more, see: Tesla to Unveil ‘Unreal’ Semi Truck on October 26.)

Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.

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