Tesla share price: what to expect from Q2 results

Recent fresh record highs have been enticing plenty into trading Tesla shares, and expectations are for a negative earnings reading.

It’s been a busy quarter for Tesla shares, its price shedding half of its value at the start of the second quarter (Q2), breaking below $400, before reversing to end the quarter above $1000.

And it’s only become busier since, with recent fresh record highs. In the process, it’s become the most valuable car company in the world by market share. Anticipation is rising that it’ll be included in the S&P 500 index, forcing exchange traded funds (ETFs) and index-tracking funds into buying it, provided it can manage a fourth consecutive profit earnings figure. (The committee that oversees the index may include it regardless but it would be an exceptional case should it fail to post a positive reading.)

When is Tesla’s results date?

There’s much confusion over whether to label it an electric vehicle company at a time when transportation demand is depressed and the auto sector is in pain, or a tech company as investors buoyed by central bank easing flock into the tech sector and tech-heavy indices like the NASDAQ.

That confusion is unlikely to subside, but its earnings will be released on Wednesday, 22 July after market close, and should offer more clarity to analysts whose estimates continue to vary significantly.

Tesla share price: forecasts from Q2 results

While a positive earnings per share figure would aid Tesla in its inclusion into the S&P 500 and make it at current market cap levels one of the index’s largest, current estimates are for a negative reading, and for revenue to drop on last year’s $6.35 billion.

Production and delivery figures released earlier this month showed deliveries of about 90,650 vehicles and easily beating estimates of 72,000 vehicles. In production only 6326 units of its higher priced (and higher profit margin) Model S and Model X vehicles were made, and in turn the bulk of the 82,272 vehicles produced were from the lower priced Model 3 and Model Y.

Trading Tesla’s Q2 results: technical overview and trading strategies

The technical overview for Tesla remains volatile (to say the least), with its main technical indicators flashing green and an average directional movement index (ADX) showing an ongoing propensity to trend.

Tempting as it may be to label it a bull trend, the increased volatility beyond its averages, the breakage of its key pivot points with ease, and the enticement of investors, traders both large and small, and predatory algorithms into Tesla shares means its technical overview is better labelled as volatile.

That means contrary to the classic buy vs. sell mentality in approaching a stock, strategies that conform to the current overview should it persist would be breakout strategies anticipating a break/breach of its key pivot points (to the upside or downside).

Secondly, there would be contrarian overview strategies that would give reversal strategies a chance to initiate should the level get breached significantly, initiating as prices retrace for the session but risk getting stopped out should volatility surge.

IG Client sentiment* and short interest for Tesla shares

While traders are holding heavy to extreme long bias in the FAANG stocks (Facebook, Apple, Amazon, Netflix and Google/Alphabet), the bias amongst traders for Tesla has been majority short for most of this period, and hence haven’t been beneficiaries of the latest bullish moves in its share price like they have been with other tech shares some of which have been making fresh record highs.

The start of last week’s majority short 60% bias has shifted to the middle at the start of this week as fresh longs get enticed into initiating and stops get triggered, with a rare 50/50 bias.

It also hasn’t been a positive story for shorts on the exchange as around the same time last year over 41 million shares were short, that figure dwindling to under 14 million in the latest reading and no doubt squeezed heavily and sustaining big losses.

It represents around 9.5% of the total shares floated. Any further upside movement will continue to push and punish shorts into unwinding at a higher price, forcing them into paying any price to close their bleeding short positions.

Tesla Chart with IG client sentiment

*The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as the start of this week for the outer circle. Inner circle sentiment is from the start of last week.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Look closer this US earnings season

Discover opportunities with using our award-winning technology* and range of educational resources.

  • Get expert analysis on upcoming announcements
  • Set automated alerts to never miss an opportunity
  • Choose from 13,000+ shares with our stock screener

* Based on the Investment Trends 2018 Singapore CFD & FX Report based on a survey of over 4,500 traders and investors. Awarded the Best Online Trading Platform by Influential Brands in 2019.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.