Stocks of electric car company Tesla (TSLA) are sharply higher again in the opening adding 15.50% or $115 at $896.54. Now the capitalization of TESLA has reached 164.44 billion. Now TSLA has a higher market cap than Ford, GM, Fiat Chrysler and Daimler combined. The strong opening today comes after TSLA had sharply rise the last trading sessions including a 20% gain yesterday. On previous Wednesday the day it reported the earnings, the TESLA stock was at $560.
Tesla reported quarterly earnings on Wednesday January 29th. Tesla quarterly earnings beat Wall Street estimates and set a goal to sell more than 500,000 vehicles in 2020. TSLA earned $105 million, or 0.56/share, in the 4Q, compared with $140 million, or 0.78/share, in the year-ago quarter. Adjusted earnings, came in at $2.14/share, above the $2.00/share a year ago. The revenue rose just by 2% to $7.4 billion, compared with $7.2 billion the previous year. Tesla delivered 367,500 vehicles in 2019, an increase of 50% of the prior year.
At this point the value appreciation is a bit hard to understand. Tesla’s valuation is now very demanding and can’t be justified by the 4Q numbers. Analysts continue to increase the price target for the stock, and that clearly helps the bulls. There is also some short-covering as the recent rally is kicking out all the bears. Expectations and sentiment drive the stock price. Investors have to be very careful at the current level as some profit-taking can’t be ruled out.
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TSLA stock has outperformed all of its peers and is 116% higher since the beginning of the year. Today TSLA is 14.82% higher at $895.01. The technical outlook is clearly bullish but traders should not ignore that the stock has reached overbought levels. The RSI (14) index has reached 93.07 and extreme overbought level, so a pullback can’t be ruled out.
On the upside the first resistance stands at $940.13 the daily top. A close above might challenge the $1000 psychological mark.
On the downside, initial support stands at $833.88 the daily low. A break below might accelerate the downtrend and the stock price might go to fill today’s gap ($782-$833) and meet the support from yesterday’s trading session at $782. More bids might emerge at $674 the low from yesterday’s trading session.