nasdaq 100
If there is one company that outperformed the market since the COVID-19 outbreak, it is Tesla. Its share price rose parabolically, defying gravity at a time when most investors were afraid to put capital at work on the stock market.
Many reasons are behind Tesla share price performance this year – Elon Musk’s vision or the new generation of young investors are only a couple of them. Fractional shares investing made it possible for small investors to buy shares of companies that otherwise they will not have access to due to lack of liquidities.
One of the most anticipated earnings releases in recent times is that on Tesla on Wednesday. Tesla’s share price, already volatile in the second quarter, will be in the center of attention and will likely drive the volatility in the US stock market.
The investors’ focus and the primary driver in Tesla share price will, once again, be profitability. Will Tesla beat expectations and show a GAAP profit in the quarter?
It already surprised market participants by reporting $1.14 EPS in the first quarter on expectations of $-0.21. For Q2 2020, the consensus is for a loss of $-0.28 – will Tesla beat expectations again? It is currently trading in the pre-market up 0.7% to $1512.11.
The $1000 mark proved to be critical in Tesla share price’ evolution. In the first attempt, it rejected the price after the market put a perfect double-top formation. However, as the general recovery in the stock market continued, Tesla share price gained ground and climbed back to the $1000 level.
For a while, it formed an ascending triangle – a continuation pattern leading to higher prices. And so it did, as Tesla share price did not look back ever since.
It currently consolidates in what may be another continuation pattern – a pennant formation. Its measured move usually equals the advance prior to the pennant’s consolidation (i.e., the move from the ascending triangle’s breakout to the current consolidation).
If Tesla beats Q2 earnings, $2000 could come in a jiffy. If not, the $1000 is still yet to offer some support on any move lower. Considering Tesla share price’s struggle to break above it, it is likely the place where new bids await a possible pullback.
