Skip to main content

Shares of Tesla (TSLA) - Get Tesla Inc Report are in bull market territory, up 55.7% since their post-election day low of $178.19 set on Nov. 14. The most important reason to like the stock is the creative entrepreneurial spirit of its CEO Elon Musk.

When the company reports quarterly earnings after the closing bell on Wednesday, it will be the first earnings report since Tesla acquired SolarCity. Investors will be interested in how Musk plans to combine solar applications with motor vehicles. Other issues on Wall Street's radar include battery costs and production goals of the Model 3 automobile. The company dropped the word Motors from its name, signaling that investors should focus on the future not near-term results.

Analysts expect Tesla to lose $1.19 a share in the fiscal quarter ended Dec. 2016. Zacks warns that Tesla missed delivery estimates in the fourth quarter and for all of 2016. Earnings released on Oct. 26 included better than expected earnings-per-share. After a positive reaction on Oct. 27, the stock slumped to its post-election low of $178.19 on Nov. 14.

Shares of Tesla closed Tuesday at $277.39, up 29.8% year to date, and set a post-election high of $287.39 on Feb. 14. The stock is in bull market territory 55.7% above its Nov. 14 low. Keep an eye on Tesla's all-time intraday high of $291.42 set back in September 2014. Despite extreme volatility since then, the stock is 96.7% above its Feb. 9, 2016 low of $141.05.

Here's the daily chart for Tesla.

Image placeholder title

Courtesy of MetaStock Xenith

The daily chart for Tesla shows the Fibonacci Retracement levels from the all-time high to the February 2016 low.

It was a quick launch for the stock from the $141.05 low through the 23.6% retracement of $176.29 on Feb. 22, 2016. The 38.2% retracement of $198.28 was captured on March 4. The stock catapulted its 50% retracement of $216.06 on March 15. The 61.8% retracement of $233.84 was jumped on April 1. After trading as high as $269.34 on April 7, the rollercoaster reversed direction.

TheStreet Recommends

Note how the retracement levels provided magnets on the way down to its post-election low of $178.19 on Nov. 14, which was above the 23.6% retracement of $176.29. It did not take long for the stock to rocket higher since then with the post-election gain of 55.8% on Tuesday's close of $277.55. The Feb. 14 high of $287.39 and the all-time high of $291.42 set in September 2014 are considered strong technical resistances.

Here's the weekly chart for Tesla.

Image placeholder title

Courtesy of MetaStock Xenith

The weekly chart shows a red line through the price bars, which is the key weekly moving average (a 5-week modified moving average). The green line is the 200-week simple moving average considered the "reversion to the mean".

The study in red along the bottom of the charts is weekly momentum (a 12x3x3 weekly slow stochastic), which scales between 00.00 and 100.00, where readings above 80.00 indicates overbought and readings below 20.00 indicates oversold.

A negative weekly chart shows the stock below its key weekly moving average with weekly momentum declining below 80.00 in a trend towards 20.00. A positive weekly chart shows the stock above its key weekly moving average with weekly momentum rising above 20.00 in a trend towards 80.00.

The weekly chart for Tesla is positive but overbought with the stock above its key weekly moving average of $252.03 and well above its 200-week simple moving average of $207.06, last tested during the week of Dec. 23 when the average was $198.44. The weekly momentum reading is projected to end the week at 91.13, up slightly from 90.85 on Feb. 17, moving further above the overbought threshold of 80.00.

Investors looking to buy Tesla should consider doing so on weakness to $250.95, which is a key level on technical charts until the end of 2017. Lower value levels are $226.23 and $214.06, which are key levels on technical charts until the end of March and February, respectively. Investors looking to reduce holdings should sell strength to $285.14, which is a risky level for this week only. My semiannual risky level is $381.28 through the end of June.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.