Tesla is one of my favorite stocks because I happen to love the products and I appreciate the fact that, like another leading tech giant, Tesla is on a mission to ‘wow’ it’s customers by giving them something they didn’t even know they wanted: the future.
Both Tesla and Apple generate loyalty by being fanatically focused on the customer experience. Unlike Apple, however, Tesla Motors is still an upstart in an industry that it has yet to transform. But Tesla is the crack in the transportation industry’s windshield that will only get larger over time.
Tesla doesn’t advertise because it doesn’t need to. The P85 Dual motor Model S with the recently upgraded 90 kWh battery pack is the fastest-accelerating four-door production car of all time. Once you drive a Tesla, you will be convinced that you are in the vehicle of the future… and you are. And in 20 years’ time internal combustion vehicles will be “so 20th Century” in the mind of the general public.
That said, in this blow-off bull market shares of TSLA have not been making all-time highs even though Credit Suisse has a target of $325 and Baird expects $335. Short interest remains high at 25%, but average daily volume is decreasing. When TSLA made its all time high in September 2014, average daily volume was 5.3 million shares. Today that figure is inverted: 3.5 million.
As you can see from the Volume Profile chart, during this rally from the March lows, Tesla has built support at $248, its Volume Profile Point of Control, and at $260 where one finds a high volume node. Keep in mind, however, that there is volume resistance here at $283 (upper red line), which means short-term traders will be taking profits here.
Nevertheless, I believe the stock will hit those analyst targets and that news flow for Tesla is largely irrelevant for its long-term performance. This includes earnings, quarterly vehicle production figures, the Model X, competition from BMW, China, you name it. This is a company whose shares should be bought on every piece of bad news.
