Sign InTesla (NASDAQ: TSLA) Soars 6.54% on Bullish Technical Indicators & Strong Q2 Deliveries
Summary
As of July 03, 2024, Tesla, Inc. (NASDAQ: TSLA) closed at $246.39, surging 6.54% amid strong Q2 deliveries and bullish technical indicators, prompting analysts to see potential for further short-term gains despite concerns over high valuation and overbought conditions.
Technical Analysis
Tesla, Inc. (NASDAQ: TSLA) closed at $246.39 on July 03, 2024, marking a significant increase of 6.54% with a price change of $15.13. This surge is part of a recent rally, bringing the stock close to its year high of $299.29. Despite a momentary pullback to $234.25 during the trading session, the stock reached an intraday high of $248.35.
Key technical indicators suggest bullish momentum:
- The Relative Strength Index (RSI14) is at 88, indicating the stock is currently overbought. - The Moving Average Convergence Divergence (MACD) for the past three months is at 4.78, reflecting positive momentum. - With an Average True Range (ATR) of 3.80, price volatility shows moderate levels, and stop-loss is calculated at $239.64.
The stock's 50-day moving average ($179.34) and 200-day moving average ($205.70) are significantly below the current trading price, showing upward momentum over recent months. The next support level is identified at $231.26, with no immediate resistance barriers, as the stock is trading near recent highs.
Fundamental Analysis
Tesla's market capitalization stands at $785.79 billion, underlining its position as a significant player in the EV market. The stock's P/E ratio of 63.02 suggests a high valuation relative to earnings, supported by an EPS of $3.91. An earnings announcement scheduled for July 17, 2024, represents a potential catalyst for future price movements.
Recent news indicates a strong performance in vehicle deliveries, surpassing consensus estimates by 1% with 437,812 vehicles delivered in Q2. This outperformance, combined with rising analyst price targets, indicates robust demand and a potential mitigant to concerns around inventory management. Industry analysts note positive prospects from the AI boom, with Tesla expected to benefit substantially.
The discounted cash flow (DCF) model indicates a value of $66.95, significantly below the current trading price, suggesting the stock might be overvalued based on future cash flows alone.
Short-term and Long-term Predictions
Next Trading Day (July 05, 2024):
Given the positive sentiment and above-average volume (164.07 million compared to the average of 90.52 million), TSLA may see continued buying interest. The lack of immediate resistance and the current momentum suggest a probable uptrend, potentially testing the recent highs.
Upcoming Week:
With bullish momentum and no immediate resistance, the stock might continue appreciating, aiming for the psychological level of $250. However, traders should remain cautious of the high RSI indicating possible pullbacks if profit-taking occurs.
Intrinsic Value and Long-term Potential
The DCF value of $66.95 raises questions about the stock's intrinsic valuation relative to its market price. Despite this, Tesla's growth prospects are underpinned by its leadership in the EV market, advancements in AI, and energy storage deployments. These factors contribute to a more favorable long-term outlook.
Overall Evaluation: Hold
Despite the high P/E ratio and overbought RSI, the current uptrend driven by strong Q2 deliveries and raised price targets from analysts indicates potential short-term gains. However, the discrepancy between market price and the DCF value suggests a cautious stance for long-term valuation. Holding the stock allows investors to capitalize on short-term rallies while evaluating long-term growth.
