While Ford (F) – Get the report rebounds with the introduction of its new Bronco, and as General Motors (GM) – Get the report and Fiat Chrysler (FCAU) – Get the report stocks go up, performance has nothing to do with Tesla.Traders are now tapping into whether shares of the electric vehicle maker will continue to hit new highs after Tesla reported earnings after Wednesday’s close.The company has already delivered better-than-expected delivery results for the second quarter. Can he serve another bull victory with his winnings?
Trade Tesla share
Take a moment to look at the stellar volatility that we have seen in this stock. Shares fell 59% between the February high and March low, sending the bears into a short-lived moment of glee.
I must mention that Tesla is not worth trading from a valuation standpoint. It has a market capitalization of almost $ 300 billion, even though it lacks the fundamentals to back it up. Someday the assessment will matter, but that day probably won’t be tomorrow.
Because this stock is not tied by traditional fundamentals, let’s go with the price action instead.
From the March low to the recent high, Tesla stock has quintupled, topping nearly $ 1,795. The stock continues to hold above the 10-day moving average as the bulls continue to dominate this name.
On the upside, see if Tesla can turn above the current high near $ 1,795 and stay above that mark.
If he can do that, he puts the 261.8% extension on the line at $ 1,969, followed by the $ 2,000 level. I know it sounds crazy, but so did the last rally.
On the downside, a move below the 10-day moving average and an extension of the range twice could accelerate the selling pressure.
In this case, I’d like to see how the stock comes close to $ 1,300. There he finds the 161.8% extension and the 20-day moving average.
Below could force an eventual decline towards the 50-day moving average and uptrend support (blue line) near $ 1050. It could also put the breakout area between $ 900 and $ 1,000 on the table.
With Tesla, traders need to go level by level and be aware of the trend. When that changes, so should they.
Summer tends to be a turning point for Tesla. Last year was the bottom. In 2015, 2017 and 2018, it was the top. That’s not to say summer 2020 will matter, but it’s worth pointing out.