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Tesla (NASDAQ: TSLA) Holds Neutral Position Amidst Resistance Levels—Caution Advised

StockInvest.us, 2 weeks ago

Tesla Technical Analysis

Tesla, Inc. (NASDAQ: TSLA) closed at $177.94 on June 06, 2024, trading within a daily range of $172.73 to $179.73. The stock appreciated by 1.68%, adding $2.94 to its previous close. The market activity saw a volume of 69.55 million shares, lower than the average volume of 91.87 million, indicating limited trading interest. The Relative Strength Index (RSI14) of 53 suggests that the stock is currently neither overbought nor oversold.

The 50-day moving average stands at $172.15, and the 200-day moving average is at $211.42, pointing to a bearish trend in the longer term. The Moving Average Convergence Divergence (MACD) of 0.86 further indicates slightly bullish sentiment in the short term. The Average True Range (ATR) of 3.92 implies that the stock has moderate volatility.

Key support is found at $164.90, with resistance at $183.28. Employing a tight stop-loss at $167.38 could mitigate downside risk. Given the proximity to its resistance level and the moderate technical indicators, a cautious approach for the next trading day (June 07, 2024) and the upcoming week is warranted.

Fundamental Analysis

Tesla's current market capitalization totals $567.49 billion, placing it firmly among the largest tech and automotive companies globally. The stock sports an EPS of $3.91 and a P/E ratio of 45.51, indicating a significant premium investors are willing to pay for growth potential despite its inherent volatility.

The company's DCF valuation is calculated at $64.99, revealing that the stock is trading substantially above its intrinsic value. Analyst price targets range widely from $85 to $526.67, with a median consensus at $195. The prevalent opinion among analysts is a “Buy,” with 23 buys, 11 holds, and 3 sells, corroborating robust growth expectations.

Tesla Institutional remarks highlight the critical role of Elon Musk's leadership, pointing to potential boardroom challenges, including a contentious $56 billion pay package. Concerns about governance and dependence on Musk add an element of risk for investors. However, the ongoing advancements in EV technology and expansion efforts render long-standing growth opportunities credible.

Performance Predictions

For the next trading day (June 07, 2024), TSLA's stock may exhibit fluctuations around the resistance level of $183.28. In the short term (upcoming week), minor upticks towards $185 could occur if bullish momentum persists, driven by market sentiment and key support levels holding firm.

Intrinsic Value & Long-Term Investment Potential

Tesla's intrinsic value is calculated significantly below its current market price, suggesting the stock is overvalued on a DCF basis. Overvaluations in high-innovation sectors like EV may often persist due to strong growth prospects. Long-term investments should factor in both Tesla's leadership in the EV space and the inherent risks of volatile market perceptions and governance issues.

Overall Evaluation

Based on the combined technical and fundamental analyses, TSLA is classified as a 'Hold' candidate. The stock currently shows neutral technical indicators with near-term resistance and has substantial long-term potential despite governance risks and overvaluation concerns. Careful monitoring of market conditions and governance developments is advised.

Check full Tesla forecast and analysis here.