Tesla hopes to turbocharge its share price

As the firm prepares to announce a new product and earnings, will its new found confidence be shared by investors?

Tesla
Source: Bloomberg

The electric car-company has endured a somewhat tumultuous existence since its IPO in 2010. However, with the firm beginning to turn some profits back in 2013, there were signs that the industry could potentially be a profitable one.

Tonight we will see Elon Musk announce one of the worst-kept secrets, as the firm ventures into batteries with as much gusto as it sells cars. Of course there is substantial cross-pollination between the two sides of the business – the firm already owning a battery creating factory in the Californian desert. It is clearly attempting to utilise that new found expertise to gain a market share in another sector.

The focus is expected to be more towards home and industrial batteries which could be used for storing energy, such as solar or wind power. Whether this will prove a hit with investors remains to be seen, especially given that much of this announcement has already been inadvertently leaked by the firm itself. Regardless, we also have the earnings report due in a weeks’ time (Thursday 7 May) which is expected to post, by far, the largest earnings per share (EPS) figure to date of $0.81.

From a technical standpoint, the Tesla shares have stalled somewhat since September’s high of $291.41. The failure to create new highs, accompanied by flatlining bottoms, is certainly not what Tesla bulls will be hoping for as it leads to the potential of a head and shoulders formation. However, perhaps it is the recent bullishness surrounding Tesla’s new battery storage ventures, but the price has managed to create a new 2015 high this week and is looking like we could see some sort of recovery going forward.

With that in mind, I am expecting to see the share price continue to pick up in the medium-term, with a move back to $250.00 seeming attainable. That being said, the inability to break above $291.41 could mean the formation of a second shoulder.

Ultimately, the direction of the shares will likely take substantial direction from the fundamental side of things. Thus, the key thing to bear in mind is that any close below $177.24 would be a big bearish indicator and in the shorter term, as long as price remains above the last swing low (currently $217.00), I am bullish. In the meanwhile, look out for those intraday continuation and reversal patterns to gauge direction.

Tesla is available for extended hours trading.

Tesla

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