TSLA Analysis - What you Need to Know

Nickola Tesla was a quirky genius and a very poor businessman. Elon Musk is a quirky genius and his business acumen is improving in tandem with the vehicles his company is producing.

Tesla Motors has been faulted by analysts recently due to its delay in getting cash flow positive. In mid-March, however, the company drew rave reviews from a group of analysts who made a site visit. They literally gushed over what they saw and felt.

Curiously, just before the launch of the Model III in late March, S&P Global Market Intelligence’s Efraim Levy cut shares to “Sell,” citing valuation and execution risk. Moreover, Levy put a paltry $155 target on the stock.

Of course, few analysts have a good sense of timing and Levy’s meager valuation number represents the viewpoint of a great number of Tesla skeptics. That said, I believe they are going to be disappointed in their bearish thesis and we will witness the stock going to all-time highs in short order.  

Reason #1 is that Tesla Motors had a fabulously successful pre-launch of its $35,000 Model III sedan, collecting more than $300,000,000 in deposits for a vehicle that will probably not be available until early 2018. The uber-response means there should be little doubt about the mass market demand for Tesla’s mass market vehicle. The Millennials love Tesla and the company’s dream/plan of selling 500,000 cars in 2020 will not be demand constrained.    

Reason #2 occurred today (4/11). After announcing a recall of 2,400 Model X SUVs due to a potentially faulty back seat hinge, shares of Tesla were down… 46 cents. This on a day when the Dow plummeted 115 points during the final hour. The logic is simple: if Tesla can’t go down on bad news, it is probably not done going up. And there are technical reasons, also.  

Based on its Volume Profile Point of Control at $247.50, TSLA has important support right here (shares closed at $249.92). A symmetry analysis using previous swings shows a confluence of projection targets near the all-time high of $291. I’d bet money TSLA will get there so if the broader market doesn’t absolutely crack here, I’m looking to buy this dip.

 www.daytradingpsychology.com/mastermind (Turn good analysis into actual profits).

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