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Tesla stock price poised for a breakout ahead of Q4 earnings

Tesla has enjoyed a remarkable run higher over the past year, but can it keep the positive news flowing as it looks ahead into 2021?

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When does Tesla report earnings?

Tesla reports earnings for the fourth quarter (Q4) on 27 January, after the market closes.

Tesla earnings – what does the Street expect?

Tesla is forecast to report adjusted earnings of $1.011 per share, up 136.2% over the year, and a 40% rise in revenue to $10.33 billion. It has beaten estimates in five of the last eight reports for both earnings and revenue.

As well as the numbers above, the market will focus on the level of deliveries, both for this quarter and for 2021 overall, having kept its 2020 guidance intact. Analysts will also watch for any commentary on upcoming models such as the Cybertruck and a cheaper car model that may well help the firm broaden its appeal to new consumers previously put off by the high price tag of its products.

How to trade Tesla earnings

Tesla’s previous earnings report saw the stock gain a modest 2.8% on the day. On average the stock sees a move of 6.8%, but current options pricing points towards a move of 4.6%.

Learn more about trading Tesla options with IG

Of the 41 analysts currently covering Tesla, 13 have ‘buy’ recommendations, with 15 ‘holds’ and 13 ‘sells’. Notably analysts are very cautious on the price outlook, and the current median target price of $561 is well below Tesla’s $846 stock price (as of 22 January).

Tesla stock price – technical analysis

Tesla’s relentless rally shows no sign of slowing, or indeed reversing, but the price has been capped below $900, with no attempt to clear the $881 level that marked the high earlier in January. A move above this level would likely be greeted with strong gains, given the strength of the rally thus far.

The price also hovers near rising trendline support from early November, helping to prevent any downside for now. A miss on earnings or some disappointment with the outlook could see this support broken, which could open the path to the 50-day simple moving average (SMA) down at $656.

Tesla chart Source: ProRealTime
Tesla chart Source: ProRealTime

Tesla looks toward further gains

It has been unwise to bet against Tesla throughout the past year, and while the expectations surrounding performance will be tough to beat, there seems little sign yet that the market will fall out of love with this newest and most glamorous addition to the S&P 500.

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