- Tesla is set up for a rally on Tuesday.
- TSLA stock now looks to target $281 resistance.
- TSLA failed to test support at $266.15.
UPDATE: Tesla stock advanced 3.5% in the first half hour of Tuesday’s trading session. This was far in excess of the Nasdaq’s 1.2% gain, demonstrating yet again that no matter how large Tesla gets ($894 billion currently) it remains a high-beta stock. TSLA stock made it as high as $288.26 early in the session. The whole Street seems to be calling this sudden rally Turnaround Tuesday, but it primarily seems as if markets could not fundamentally drop for a sixth straight session. An internal memo at Tesla is asking employees to work a little harder as the carmaker is set to report record deliveries for the quarter ending in September. Nearly 25,000 contracts have traded this morning for the $285 calls expiring on Friday. At $6.80 per share, these calls have exploded 97% in value on Tuesday alone.
Tesla (TSLA) stock looks set to rally on Tuesday as equity markets attempt to put in a bottom. Turnaround Tuesday is the favourite term of media analysts, and it may actually come to pass if initial signs are held. Monday was an attempt at a rally before a poor US 2-Year auction slapped equities back down again in the face of yields retaking their gains for the session. The Dow Jones did manage to make a new low for the year, but so far the Nasdaq and S&P 500 have failed to do so. That could set up the possibility of a bullish double bottom. Of course, it could also mean we are just pausing for breath and that another leg lower is imminent.
Tesla stock news
Tesla did outperform as it closed in the green on Monday. Nothing especially stock specific, but perhaps this was an early sign of a risk-on rally. Bitcoin too failed to break lower, and Tuesday sees it up 4%. Tesla is one of the most volatile and high beta stocks we focus on, so any risk-on moves should see an outsized move in Tesla. A fire at Tesla’s factory in Berlin was apparently overlooked as sentiment finally improved. Tesla is a significant move away from its June lows, while the overall market teeters on the brink. Tesla is 30% higher than its June lows of $206.86.
Have things improved that much since June? That is the key question. News this morning from Reuters looks less positive as the report says Giga Shanghai will run below maximum despite a recent upgrade. However, Electrek reports that Tesla has asked employees to help as it expects very high deliveries at the end of the quarter.
Tesla stock forecast
Have we a temporary bottom in place? Certainly while as mentioned Tesla is 30% above its June low, it has not even tested the September low at $266. We do have the beginnings of a possible short-term bottom though. Tesla needs to hold above $266, and then that will lead to a test of $281.24. A break of that level once again needs confirmation from a quick gap fill up to $285.82. That then brings $314.64 into view. Tesla has failed here numerous times. $266.15 is the short-term pivot, a break and Tesla will in my view move quickly to $240 and then test the June lows.
Tesla (TSLA) chart, daily