Skip to main content

How to Trade Tesla After It Beats Delivery Expectations

Tesla doubles its first-quarter production results year over year and shares vault higher on the news. The stock's not out of the woods yet though.

Tesla  (TSLA) - Get Tesla Inc. Report was in focus Friday after the company announced its first-quarter deliveries. However, the stock was not in focus.

Due to a market holiday, U.S. stocks didn't on Friday. However, investors didn’t forget about the automaker over the weekend. Shares have risen about 5% on Monday and were trading just below $700. 

The company delivered 184,800 vehicles in the first quarter, up more 100% year over year and up 2.4% sequentially. It also cleared consensus estimates of roughly 177,000 vehicles.

The news resulted in a strong upgrade, with Wedbush analyst Dan Ives raising his price target to $1,000 a share.

Ives also had positive comments on Ford  (F) - Get Ford Motor Company Report and General Motors  (GM) - Get General Motors Company Report as the two automakers continue to advance their electric plans.

Will this be enough to put Tesla shares back in a bull trend? Let’s look at the chart.

Ford is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells F? Learn more now.

Scroll to Continue

TheStreet Recommends

Trading Tesla

Daily chart of Tesla stock.

Daily chart of Tesla stock.

When we look at the daily chart for Tesla, the stock did a great job firming up around $600 last week.

Shares continued to hammer off that level, refusing to retest the 10-week moving average and the prior March low at $539.49.

We had a mixed session prior to Monday’s, where Tesla popped above downtrend resistance and the 100-day moving average, but closed below both as bulls lacked confidence ahead of the long weekend and deliveries report.

The price action is much better with Monday’s move. However, we still have Tesla struggling at a key area, as the $700 to $715 zone has been resistance since late February.

Bulls need to see Tesla clear Monday’s high at $708.16. Above that opens the door to $715-plus, putting the 50-day moving average in play. If Tesla can clear the 50-day, then we can start talking about a return to $800 or higher.

From here, we don’t want to see shares break below the 100-day moving average. If they do, the 10-day and 21-day moving averages are in play.

Below those marks could put uptrend support on the table, followed by the $600 level. If tech stocks begin to find some momentum, Tesla already has the good news it needs to go higher. Let’s see if bulls can harness control of the stock from here.