Tesla share price opened the day’s trading session with a gain of 6.5%, which adds to yesterday’s 4.08% gain. How come Tesla share price is doing so well when other automakers are floundering?
Well, it happens that the company’s first-quarter earnings for 2020 blew away all expectations. Analysts were expecting a loss per share of 28 cents and revenue of $6.1 billion. But Tesla did the unthinkable: amidst the coronavirus shut-ins and lockdowns which has kept its primary operations in Fremont closed, it posted earnings per share of $1.28 and revenues of $5.99 billion. Wall Street is so impressed by the performance of Tesla, that Wedbush has raised its Tesla share price projection for 2020 from $425 to $600 per share. Barclays feels the stock is underpriced, and Morgan Stanley continues to reiterate its positive long-term forecasts for Tesla share price, as it expects the company to deliver at least 50% more cars in 2021 than it did in 2019.
Tesla still has a lot to deliver, and one can only wonder what would have been if the company was operating at full capacity.
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After opening 6.5% higher following the premarket surge, Tesla is attempting to close the gap between today’s open and yesterday’s close, but this has stalled at the support located at the 820.69 price level. This price is the 23.6% Fibonacci retracement from the swing low of 5 December 2019 to the swing high of 4 February 2020. Price had retraced to the 88.6% Fibo retracement point but has steadily climbed throughout April to the current levels. If the 820.69 support level holds, Tesla share price may have an opportunity to target the 5 February swing high at 968.99. However, this move would have to contend with the resistance levels at 864.01 (prior low of 20 February and close to today’s intraday high), as well as 912.32 (20 February high).
On the flip side, a downside break of 820.69 allows Tesla stocks to pullback towards the previous high of 3 February at 784.76, with 743.63 lurking nearby. 726.57 (38.2% Fibonacci retracement) could also come into the picture if a selloff continues. The basis for any selloff would be the conclusion of the harmonic pattern whose D point terminates at the 121.2% Fibonacci extension from the downside wave that started at 25 February and ended at 18 March (XA wave on the chart).
Time will tell which of the moves will play out on the Tesla share price charts.