Shares of Tesla motors received a nice bump after a massive price target increase from Morgan Stanley. Morgan Stanley analyst, Adam Jonas increased his target from $280 to $465. His note anticipates a new business for the electric car maker that will have fully autonomous cars. Mr. Jonas names the potential new business as Tesla Mobility. He also targets Tesla to triple potential revenues by 2029 and to achieve 1% of market share of miles traveled.
Tesla could remain a long-term buy as long as we do not see any major issues with its rumored third-generation car, the Model III. This car is expected to be ready for sale in 2017 and the expected price is $35,000.
The company’s shares were up over 4% to $254.23. Price action on the Tesla daily chart show that the recent rally that occurred from the bullish ABCD pattern on August 12th could potentially face key resistance from a downward sloping trendline and the 50-day SMA.
Price has gapped higher to start the trading week, and if we see the bullish move fail to rally above the $262.50 level, we could see a consolidating range occur with the $243 level providing key support. Closer to the end of the fourth quarter, we could see price target the $290 area. While my longer-term price target is $320, we could see range trading for the rest of the year.
The Trade: Buy Tesla shares at $243, with a stop loss of $233 and take profit of $273. The risk/reward ratio is 1:3.
