From the Aug. 11 low to Tuesday’s high at $502.49 - a span of 15 trading sessions - Tesla stock has risen an astounding 84%.
The company now boasts a market cap of $460 billion. Even with Tuesday morning’s quick selloff, shares are back to flat on the day after the company announced it will raise $5 billion.
Why wouldn’t Tesla raise money at this point? Shares are up more than 600% from the March lows and 1,000% over the past year. A 10-bagger in 12 months at this size is simply incredible - there are no words to describe it.
Trading Tesla Stock
On a post-split basis, shares have rallied from roughly $275 to almost $500 in a few weeks. That move is unsustainable in many ways, although there’s no need to step in front of a freight train.
The breakout on August 12th put a run to all-time highs in play. Once it cleared $2,000 though ($400 in a post-split world), that’s when we put the $2,500 ($500) target in play, as well as the 361.8% extension.
That got some push back, as many felt the move had already gone too far, too fast. But here we are, with Tesla stock temporarily clearing $500 this morning, leaving the 361.8% extension in play up at $517.63.
Above that will eventually put the four-times range extension in play near $565, followed lastly by the 423.6% extension, near $594.
Can it get there? I certainly won’t say it can’t, although a run of this magnitude is not a sustainable one. I’m not sure when Tesla stock will correct or how far it will decline when it finally does. However, it starts with a close below the 10-day moving average.
Believe it or not, but sub-$350 could be in play under the right circumstances. Even then, the setup wouldn’t be all that unhealthy, as Tesla simply returns to prior resistance from July.