I ventured to read outside of my cozy Forex interest, and peeked into the US car industry and market. I was quite taken by the divergence between stock valuation and a growing sentiment of impeding collapse.
Here is one interesting company that clearly blazes its own trail for the future of the car company. Question is: Can it do this without a sufficient structural base of consumers? Would selling 27,000 cars over 4 years (that is, since its 2010 public inception) while generating $1 billion in cumulative losses over the last six years inspire you to own this audacious company? Well, to frame it other terms: General Motors, a comparatively far less valued company to Tesla Motors manages to sell about 27,000 cars every day counting weekends.
It seems to me that the structural changes that are about to affect large luxurious ticket items are resting on a precarious base of consumers under aging demographic and widespread deflationary threats, where the former will redirect consumer needs and the latter will hinder consumer demand - Like the song says, you can't always get what you want, but you might get what you need.
- Is Tesla responding to that need?
On a pure predictive/forecasting model basis, the short and mid-term data has confirmed a market reversal signal, whereas the long-term remains .
The following are the two most immediate targets generated by the model:
1 - TG-1 = 162.55 - 16 MAY 2014
2 - TG-2 = 126.37 - 16 MAY 2014.
A structural analysis brings up two supportive values, defining a probable range in which price action would find greatest resistance to move forward, namely the 133.07/147.96 range defined in the chart.
Based on the predictive/forecasting model and structural data, the directional outlook is for this car manufacturer. Taking into account a domestic and worldwide economies burdened by expected social and behavioral shifts, this trader's can't help wonder whether this stock is driving impaired by some Fed-laced inhalant, or whether it sees its own light at the end of one visionary tunnel.
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- David Alcindor
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Ah! Yes, I have already looked at your past charts on this stock, and perused through the net.
- Question: Is TSLA requiring a different valuation methodology, based on what you are mentioning. I really like the technology, and it definitely has leaped into the future. Is this a case of television preemting radio market, as it was at the beginning of the century? Is there something particular about TSLA that makes it a different industry leader - One video I saw that really blew my mind was their automated production. May be you posted that video, or I saw it on Twitter, but that was really revolutionary.
The predictive/forecasting model I have depends on the aggregate behavior of institutional players, but they too have been on the wrong side of the market many times over.
I will definitely keep a (weekly) eye on this one.
Thank you Tim for your amazing fundamental insights. Much appreciated and edified.