After downward trends for most of this year, Tesla shares have raced ahead in the last week.
The last 5 sessions saw a spike of 8%, gaining momentum on Friday as the upcoming offering of bond and stock closed at $3 billion raise in capital. However, it still is 32% less than its annual high and per share value was down 2% at $249.90.
Managing Director at BK Asset Management, Boris Schlossberg said he was (and still is) skeptical of the stock from $300s, and thinks it will be a long speculative wait now that investors have stopped falling for the dream that is Tesla, and are beginning to look on Tesla’s reality. Reality is focused essentially on sales and its execution – the two areas that Tesla appears to fall short.
In the last quarter, actual delivery of 63,000 vehicles was below estimates of 76,000. The sales of the vehicles have also dropped by 41% over the previous quarter. Elon Musk CEO Tesla said increased delivery in Europe in Q1 sent increased deliveries into Q2, thereby having a negative effect on the net income of Q1.
Schlossberg believes Tesla is soon going to face formidable competition particularly from Volkswagen, which is really ramping up their electric vehicles business.
Chief market technician at Piper Jaffray, Craig Johnson said, looking at the charts, that he is pulling the brakes for now, until new trends develop. Being in downtrend since December 2018, he wants to confirm the lowest price range as well as have the downtrend reversed. He is not interested in Tesla’s stock, until the price is above $273.
However, there is one indicator preventing Johnson from completely turning away from the stock. He says levels of short interest have been rising, and speculations say that’s where the range’s lower end will be broken. Yet, he longs for the downtrend reversal before budging, as players of short interest have previously been mistaken.