Tesla Inc

Tesla, Inc. (NASDAQ: TSLA) designs, develops, manufactures, sells and leases fully electric vehicles and energy generation and storage systems, and offer services related to its products. The Company's automotive segment includes the design, development, manufacturing, sales, and leasing of electric vehicles as well as sales of automotive regulatory credits.

Recent Financial and Business Updates:

• In the second quarter, Tesla (TSLA) achieved a significant 47% year-over-year revenue growth, totaling USD 24.9 billion. Key drivers included increased vehicle deliveries and growth across various business segments, though the Average Selling Price (ASP) declined when excluding the foreign exchange (FX) impact, which negatively affected revenue by USD 0.6 billion.
• Profitability for the quarter saw a slight year-over-year decrease in operating income to USD 2.4 billion, resulting in a 9.6% operating margin. Factors influencing operating income included reduced ASP due to product mix and pricing changes, costs related to the production ramp-up of 4680 cells, increased operating expenses due to projects like Cybertruck and AI, as well as negative FX impact. However, positive contributions came from higher vehicle deliveries, lower cost per vehicle, and growth in the Energy business and Services & Other segments.
• Tesla's cash, cash equivalents, and investments at the end of the quarter increased by USD 0.7 billion to reach USD 23.1 billion in Q2. This growth was primarily attributed to a USD 1.0 billion free cash flow, partially offset by various financing activities, including debt repayments.
• Looking ahead, Tesla aims to expand production capacity as quickly as possible, aligning with its 50% compound annual growth rate (CAGR) target set in early 2021. The pace of growth may vary in different years based on various factors. For 2023, Tesla anticipates surpassing the long-term 50% CAGR target, with a production goal of approximately 1.8 million vehicles for the year.

Technical Observation (on the daily chart)

Currently, the stock is near an important resistance zone of USD 250.00-USD 270.00, from where price has taken resistances in the past, therefor some short-term correction can be expected before the continuation of the uptrend. The RSI (14 period) momentum indicator is at a value of 50.72, with expectations of some consolidation. Moreover, the price is currently positioned between both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term support and resistance levels respectively.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Tesla, Inc. (NASDAQ: TSLA) at the current market price of USD 246.97 as of September 01, 2023, at 09:10 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is September 01, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.