After years of repeatedly astonishing skeptics about its potential as an electric car manufacturer, as well as its ability to deliver a final product and shareholder profitability, Elon Musk's Tesla (NASDAQ 🙂 has surprised again. Beginning December 21, the Palo Alto, California-based company will now also be featured on the.
Shares of the high-flying stock rose nearly 13% in out-of-hours trading after Monday's announcement. This latest achievement is not insignificant. To be approved for listing on the benchmark, a company must be able to show four consecutive times, something that was difficult for the Silicon Valley automaker until recently.
The stock has skyrocketed in 2020 and has risen more than 400% since the beginning of the year. It closed at $ 441.61 yesterday.
In addition to the extra prestige, Tesla will enjoy automatic, extra demand because of the listing. According to the Wall Street Journal, "analysts expect the addition to further boost Tesla's stock … as approximately $ 11 trillion in mutual funds and other investments follow the S&P 500, many of which must now buy" [the shares] along with the other 499 companies in the index.
It is therefore no surprise that Morgan Stanley just became optimistic about Tesla for the first time in more than three years. The bank enthusiastically gave the company a thumbs up with an overweight rating.
That's a major shift from where Tesla was on September 9. The stock fell sharply, having lost 34% of its value when it fell to $ 330. That selloff followed the SPX's rejection at the time to list the company.
Nevertheless, the shares rose during trading that day and have risen steadily ever since. Based on both fundamental and technical aspects, TSLA still appears to be getting higher.
TSLA Daily
This week's announcement pushed stocks a whopping 12.8% higher. Yesterday the stock made a profit of 8.2%.
The trade pattern is revealing. As the stock narrowed its gains, it pushed in somewhat, but closed right above a symmetrical triangle, in place since the previous SPX rejection announcement.
The outbreak from outside shows that demand consumed all supply. The return in the pattern – presumably by taking profit – found more demand, enough to keep it above the triangle as still hungry traders increased their bids to find more willing sellers.
Mapping the moving averages reveals broader trends. The 50 DMA supports the price; the 100 DMA is supporting the entire pattern and the 200 DMA is approaching the base of the pattern, after finding support where there was resistance in July.
The height of the pattern covers the full spectrum of emotions that traders have experienced. It is projected to repeat itself in the direction of the outbreak. Therefore, the triangle height of $ 170 + is the implied target from the point of the breakout, leading to about $ 610. However, the amount of around $ 600 could be a major backlash, so we're not aiming there at the moment. beyond.
Trading Strategies
Conservative traders must wait for a long position with a new high, above September 1, $ 502.49, then wait for a return movement to maintain integrity of the pattern.
Moderate traders are likely to be waiting for the same pullout, but a better entry, if not evidence of trend.
Aggressive traders will now enter.
Trade Sample
Entry: $ 440
Stop Loss: $ 430
Risk: $ 10
Target: $ 500
Reward: $ 60
Risk: Reward Ratio: 1: 6
