2020 LOG-Bullish Targets for TESLA: {Momentum Strategy+EW Count}
Update on Tesla since my last post; Series on equities and the 2020 outlook - 26th of December 19'
My last analysis(Ref #1) on Tesla, and what has changed so far?
1. As the Christmas rally unfolds, it has been a blessing to Tesla. From my last chart, obviously Tesla broke to new highs and my chart undershot with my conservative target of 344-365. To be fair, very few, if any, were expecting new all time highs from Tesla by the end of 2019. In addition to the progress on the trade talks, secured financing and the progress on the Chinese factory, have been really adding fuel to Teslas' bull run. Log charting in combination with pitchfork seems to work better for Tesla as a highly volatile, growth stock. This time I excluded the elections noise and made the Tesla trading tree much simpler.
Updated Tesla Tree, combining fundamentals and technicals
2. And then there's the short covering(twitter.com/ihors3/s.../1209507518042574848). Overall, short interest dropped from around their peak at ~30%, to less than 20%- continuing their downward spiral. Of course, this shows confidence in the stocks performance. As mentioned on the chart, now that these news are priced in, the question is, what are some of the anticipated news and events and how they'll affect the stock price?
3. The answer to this question has three parts: Tesla's Q4 earnings, trade negotiations progress and FED policy. Next earnings are important, mostly for the reason of consistency. Two years in a row, Tesla seems to have breakout Q3 earnings, and then has proceeded to under-perform. In terms of trade negotiations, almost certainly that they are here to stay. Depending on their outcome, which will be highly correlated to all the macro factors, it might curb Tesla's demand slightly. Nevertheless, Tesla's expansion in China and Europe, decreases their operating risk by improving their production margin and operating cycle. I'm not going to discuss FED's policy in this post, but for anyone interested, they can visit my previous post on treasuries and QE-4(Ref #2).
I will sum up the analysis by breaking down some of the technicals. At the top of the pitchfork channel, Wave (3) target of 445 might be the next profit taking point in the current momentum strategy. I am expecting a slow January as the earnings season unfolds, simultaneously with the trade negotiations outcome. Currently, it's practically impossible to have a sense of the EW variation and extensions that Tesla will take. As it stands the best case scenario would be in the range of 620-640$. Teslas' Q4 earnings call in February, will give the path for the price action and the sense for the potential summer of 2020 targets.
Current wave count on the weekly:
This is it for Tesla, I tried to keep it short and failed. Any comments with your charts and feedback are very welcome!
-Step_ahead_ofthemarket-
________________________________________________________________________________________
>>I do not share my ideas for the likes or the views. This channel is only dedicated to well informed research and other noteworthy and interesting market stories.>>
However, if you'd like to support me and get informed in the greatest of details, every thumbs up and follow is greatly appreciated!
References and Disclosure:
1. Analysis on Q3 earnings:
2. Treasuries and QE-4:
Disclosure: This is just an opinion, you decide what to do with your own money. For any further references or use of my content- contact me through any of my social media channels.
My last analysis(Ref #1) on Tesla, and what has changed so far?
1. As the Christmas rally unfolds, it has been a blessing to Tesla. From my last chart, obviously Tesla broke to new highs and my chart undershot with my conservative target of 344-365. To be fair, very few, if any, were expecting new all time highs from Tesla by the end of 2019. In addition to the progress on the trade talks, secured financing and the progress on the Chinese factory, have been really adding fuel to Teslas' bull run. Log charting in combination with pitchfork seems to work better for Tesla as a highly volatile, growth stock. This time I excluded the elections noise and made the Tesla trading tree much simpler.
2. And then there's the short covering(twitter.com/ihors3/s.../1209507518042574848). Overall, short interest dropped from around their peak at ~30%, to less than 20%- continuing their downward spiral. Of course, this shows confidence in the stocks performance. As mentioned on the chart, now that these news are priced in, the question is, what are some of the anticipated news and events and how they'll affect the stock price?
3. The answer to this question has three parts: Tesla's Q4 earnings, trade negotiations progress and FED policy. Next earnings are important, mostly for the reason of consistency. Two years in a row, Tesla seems to have breakout Q3 earnings, and then has proceeded to under-perform. In terms of trade negotiations, almost certainly that they are here to stay. Depending on their outcome, which will be highly correlated to all the macro factors, it might curb Tesla's demand slightly. Nevertheless, Tesla's expansion in China and Europe, decreases their operating risk by improving their production margin and operating cycle. I'm not going to discuss FED's policy in this post, but for anyone interested, they can visit my previous post on treasuries and QE-4(Ref #2).
I will sum up the analysis by breaking down some of the technicals. At the top of the pitchfork channel, Wave (3) target of 445 might be the next profit taking point in the current momentum strategy. I am expecting a slow January as the earnings season unfolds, simultaneously with the trade negotiations outcome. Currently, it's practically impossible to have a sense of the EW variation and extensions that Tesla will take. As it stands the best case scenario would be in the range of 620-640$. Teslas' Q4 earnings call in February, will give the path for the price action and the sense for the potential summer of 2020 targets.
Current wave count on the weekly:
This is it for Tesla, I tried to keep it short and failed. Any comments with your charts and feedback are very welcome!
-Step_ahead_ofthemarket-
________________________________________________________________________________________
>>I do not share my ideas for the likes or the views. This channel is only dedicated to well informed research and other noteworthy and interesting market stories.>>
However, if you'd like to support me and get informed in the greatest of details, every thumbs up and follow is greatly appreciated!
References and Disclosure:
1. Analysis on Q3 earnings:
Disclosure: This is just an opinion, you decide what to do with your own money. For any further references or use of my content- contact me through any of my social media channels.
Comment:
Weekly RSI. Of course in a very overbought territory. Could run to 450$, before any sizable corrections appear.
Comment:
As I am getting better in analyzing equities, in the future I will analyze other major stocks such as $AAPL etc. Anyways, that will be it for today.
Feliz navidad everybody!
-Step_ahead_ofthemarket-
Feliz navidad everybody!
-Step_ahead_ofthemarket-
Comment:
The latest news on demand, dampened the bullish momentum. As the chart shows, this was expected to occur sometime in the price range of 430-445. Right now, we are in wave 4, which will last until the earnings season.
-Step_ahead_ofthemarket-
-Step_ahead_ofthemarket-
Trade closed: target reached:
Target for Wave 3 reached! Thanks to papa Musk and the good news that he keeps on delivering!
-Step_ahead_ofthemarket-
-Step_ahead_ofthemarket-
Comment:
Well beyond my expectations again!
Just hit the 1.618 extension ¬520, and it doesn't seem that it will stop any time soon.
Let's see how far wave 3 extends.
_Step_ahead_ofthemarket_
Just hit the 1.618 extension ¬520, and it doesn't seem that it will stop any time soon.
Let's see how far wave 3 extends.
_Step_ahead_ofthemarket_
Comment:
Chart going well. Target was even exceeded. This is not going well with me, movements were a bit too fast. Next week's earnings could determine if we have a sell-off back to the 400-500 range.
_Step_ahead_ofthemarket_
_Step_ahead_ofthemarket_
Trade closed: target reached:
Post ER top target reached. Much faster then expected. Not sure if I will consider this bullish. Every momentum run has it's end. This one was caused by high float % wise short covering.
Let's see where it goes from here.
Let's see where it goes from here.
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