Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

What’s Really Driving Tesla’s Surprising Stock Surge?

by April 24, 2024
April 24, 2024
What’s Really Driving Tesla’s Surprising Stock Surge?

Tesla’s (TSLA) first-quarter earnings reported after Tuesday’s market close was lackluster, bordering on disastrous. Yet the stock jumped 16% Wednesday morning, ripping open a wide breakaway gap from the previous day’s close. 

What happened? Well, Elon Musk framed the dismal numbers with a compelling narrative that elevated its underperformance into a story about future growth. But does the story have enough fundamental fuel to break above the FOMO?

From Sinking Ship to Skyrocket

Here’s a brief account of what happened on Tuesday: TSLA’s revenue in the quarter fell by 9%, its vehicle production and deliveries were also down 2% and 9%, respectively, its operating income and adjusted EPS plunged by 56% and 47%, and its operating cash flow cratered by 90%.

These figures alone would have tanked TSLA’s stock price. So, what happened? Musk got TSLA prices flying with two sentences that essentially said the company is expediting the building of cheaper EVs based on the current models. Cheaper Tesla EVs mean a surge in demand and, by extension, growth.

TSLA Stock: A Macro Look

Click here for a live chart.

In the weekly chart of TSLA below, the stock has been trading lower since peaking in October 2021 (even considering its attempt at recovery in early 2003). TSLA’s stock price is close to its 2023 low.

CHART 1. WEEKLY CHART OF TSLA. Despite the recovery attempt in early 2023, the longer-term trend has been down since 2021.Chart source: StockCharts.com. For educational purposes.

Currently, TSLA holds one of the worst StockCharts Technical Rank (SCTR) scores at 2.2, a few steps from zero. While the leading EV maker’s performance was in sync with its industry ($DJUSAU), it badly underperformed the S&P 500 by more than -45%.

Flying High on FOMO?

Click here for a live chart.

Now, take a look at the near-term price action in the daily chart of TSLA (see below). The stock exhibited a sudden burst of escape velocity to the upside after hitting a 52-week low.

CHART 2. DAILY CHART OF TSLA. Breakaway gaps are bullish, TSLA’s narrative is also bullish, but the rest of the technicals are iffy.Chart source: StockCharts.com. For educational purposes.

Breakaway gaps toward the upside are characterized by a powerful shift driven by intense sentiment. They rarely get filled right away.

TSLA’s 16% post-earnings gap is a strong bullish gesture, but notice the strong rejection in the current candle. This indicates, if anything, that the volume driving the gap may not be enough to give it a follow-through in the coming sessions (it’s a wait-and-see moment). While the Money Flow Index (MFI) and Chaikin Money Flow (CMF) (the latter dipping back below the zero line) show an ever-so-slight divergence which might be interpreted as bullish, any surge from this point on will face a few technical headwinds above.

TSLA is trading below its 50-day simple moving average, but if it crosses above it, note the critical resistance areas at the $180 and $205 range.

Bullish or Bearish?

One day’s surge, no matter how impressive, doesn’t define a trend. Likewise, a strong twist in the fundamental narrative doesn’t mark a change in the story. As far as price targets are concerned, a survey of 30 analysts shows a wide range from a shocking $23 on the low end, a median target of $185, and a high range upwards of $310 to cap it off.

Right now, everything is riding on the promises of production. As seasoned traders know, holding out for confirmation is usually the smart play. The technical indicators map out key short-term and long-term levels, giving you a clearer view of the battleground where all this drama will play out.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

0
FacebookTwitterGoogle +Pinterest
previous post
Top Tax Rates Are Already on Wrong Side of Laffer Curve in at Least Ten States
next post
A Different Perspective on “Climate Change and Globalization”

You may also like

Double Top on Semiconductors (SMH)

July 18, 2024

Not All Price Gaps Are the Same! Here’s...

May 20, 2025

Earnings for 2023 Q2, Still Trending Up

October 5, 2023

2-Year Business Cycles Matter in This Market

February 8, 2023

1st Quarter — QE Boosts Commodities and Stocks

March 31, 2023

HY Bond A-D Line Showing Liquidity Problem

February 17, 2023

Weekend Daily: Tips for Trading Profitably in a...

December 25, 2022

MEM TV: 3 Great WAYS to Play AMD...

March 2, 2024

Is a New Market Uptrend Starting? Key Signals...

March 14, 2025

Master Multiple Time Frame Analysis With This Simple...

February 14, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025
    • House witness flips script on Dem who ambushed him during hearing with unearthed tweet: ‘Iceberg is ahead’

      June 7, 2025
    • Call with China’s Xi, and Trump-Musk exchange fueled barbs during 20th week in office

      June 7, 2025
    • Trump’s conservative allies warn Congress faces critical ‘test’ with $9.4B spending cut proposal

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,568)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved