A surprising shift is occurring on Wall Street, with Electric Vehicles (EVs) making a comeback, and the market has switched gears on Tesla, Inc..
Why the Stock is About to Break Out
One well-known trader thinks the stock is poised for a breakout due to a combination of technical factors and improving sentiment.
- TSLA stock is racing higher.
- The stock has built a strong base with a series of higher lows over recent weeks, holding its 200-day moving average and drawing traders’ attention.
The Technicals
From a charting perspective, Tesla has:
- Quietly built a strong base with a series of higher lows over recent weeks
- Held its 200-day moving average, drawing traders’ attention
- Already begun to rally, gaining more than 12% in the last two days alone
The Catalyst
A catalyst ahead that could propel Tesla even higher is the third-quarter deliveries report due October 2. The consensus estimate on Tesla’s Q3 delivery numbers is conservative, with expectations sitting at the lower end of historical ranges.
Potential for Upside Surprise
The upcoming delivery report could surprise to the upside as EV credits set to expire on September 30 have likely pulled forward demand, leaving Wall Street underestimating the quarter’s true strength. A surprise to the upside on Q3 deliveries could provide another powerful pop for Tesla’s stock.
The Sentiment
Sentiment also plays a central role in the bullish call. After months of skepticism about whether Tesla’s growth story had peaked, the mood around EVs appears to be shifting. With Tesla’s technical setup aligning with a likely interest rate cut next week—and traders underweight heading into the Q3 delivery report—the risk-reward is weighted favorably to the upside.
Trader’s Opinion
Dan Nathan, a trader on CNBC’s “Fast Money,” turned bullish on Tesla stock, believing the EV business is back, with Tesla ready to run into the end of the quarter. He argues that the technicals and sentiment appear to align, setting Tesla up for a powerful rebound.
Current Stock Price
Tesla shares were up on Friday, with the current price action indicating a positive trend.