Since the major break of $635, Tesla has been trading sideways.
TSLA stock entered a high-volume zone after breaking $667.
To keep the momentum continuing, TSLA has to break $715.
After a robust surge in late June, Tesla has since halted. The move began with a break of $635. We had flagged this as a possible explosive move because the volume profile above $635 revealed how thin the volume was. This meant that if there was a break, resistance would dissipate, allowing the advance to gain momentum. This played out wonderfully, as Tesla soared through the level and closed the day with a gain of almost 5%. Since then, the movement has basically leveled out. Again, we must take credit for spotting this, as the volume profile revealed a lot of activity between $667 and $715, indicating that Tesla would struggle to gain ground. That trend continued on Friday, with the stock ending the day scarcely altered at $678.90, a slight rise of 0.14 percent.
The sideways volume following the move above $667 can be seen in the chart above as Tesla consolidates. Technical analysis suggests that the trend will continue, therefore bulls will be hoping that this is the case. Overall, things are looking up for Tesla, which is already up over 18% in the last month.
On Friday, Tesla provided delivery data, which was the catalyst for the original price increase, which was quickly debunked. With 201,250 automobiles delivered in the first quarter, the company had a solid quarter. This was a new high for Tesla in terms of deliveries, and it was about in line with expert predictions. The average analyst projection was 201k, and Deutsche Bank has lowered its forecast from 203K to 200K.
Tesla may require new money to drive more capacity for further increases in deliveries in 2021, according to a paper published by Bank of America on Monday. According to RBC, the worst of the production challenges caused by semiconductor shortages may be gone, while Wedbush estimates that Tesla will produce 900,000 vehicles in 2021 if the second half is good.
Tesla’s crucial figures
Price/Earnings 684 Price/Sales 23 Price/Book 29 Market Cap $654 billion
Enterprise Value: $753 billion Gross Margin: 21% Net Margin: 21%
three percent
$657, average Wall Street rating and price target
Tesla has produced a bullish flag pattern and is still consolidating. Tesla should finally breach the $715 level after the breakout, and the situation is similar to what it was at the $635 level. The volume profile on the right of the chart shows a considerable decline over $715, implying that once through $715, the price could accelerate significantly. When there is less volume, there is less resistance. This could be exploited once more by a good options play. Purchasing a $750 call for July 23 costs about $10 per share (the option contract is 100 shares), and a significant increase would favor both volatility and price.
The following are three reasons why the movement should or could continue:
1. The trend has paused, but a bullish flag has formed. Look for a break above $700 to signal the start of a new trend.
2. Because volume is light over $715, the advance could pick up speed.
3. Tesla remains bullish above $667. All bets are off if the price breaks lower./n
