Tesla stock turns optimistic for 2024 amid $200 billion rally
Shares of Tesla Inc. were hit hard on Friday as the world’s most valuable car company briefly erased its annual loss after a seven-day stockneck rally.
Shares of the electric car maker rose more than 30% in their latest earnings call, adding more than $200 billion to the market. Earlier this week, the rally got a boost after the company reported that it delivered goods in the second quarter that beat analyst estimates.
While analysts were optimistic about those stronger-than-expected deliveries, they marked the automaker’s first consecutive decline in quarterly deliveries in more than a decade. The automaker on Tuesday said it delivered 443,956 vehicles in the second quarter, above the 439,302 average that Wall Street analysts had estimated, but down from earlier quarters.
“The worst is in Tesla’s rearview mirror,” a Wedbush Securities Inc. analyst said. Daniel Ives wrote in Friday’s column. “Most importantly, China appears to have seen a ‘mini rebound’ in the June quarter.”
A Chinese government statement said several state-owned companies in Shanghai had purchased Tesla’s Model Y for business use. However, the increasing competition in the country has created price wars and worries about the demand of the EV maker this year.
Tesla has had a rough year as CEO Elon Musk announced a major layoff in April, followed by an additional 20% layoff.
Shares of Tesla, which had been trading within a tight range since early May, ended up breaking out. The stock has crossed its 200-day moving average – a long-term indicator that traders pay close attention to.
To be sure, there is at least one technical indicator that suggests a pullback may be around the corner. The rally pushed the stock strength index, a gauge of bullish and bearish momentum, from zero to 100, over 80 in recent days.
Tesla shares swung between gains and losses on Friday, trading about 0.9% higher at 10:05 a.m. in New York after falling as much as 1.6%.
Such a high RSI level is usually considered a sign that a decline is imminent, as overbought has occurred.
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