Can Tesla Motors Get Past a Recent Setback and Outperform?
With shares of Tesla Motors (NASDAQ:TSLA) trading around $169, is TSLA an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework.
T = Trends for a Stock’s Movement
Tesla Motors designs, develops, manufactures, and sells electric vehicles and electric vehicle powertrain components. The company also provides services for the development of electric powertrain systems and components, and sells electric powertrain components to other automotive manufacturers. It markets and sells its vehicles through Tesla stores as well as over the Internet. Consumers and companies are looking to save at the pump, and what better way to do so than with electric vehicles?
Tesla shares fell early in the week, following the announcement of a National Highway Traffic Safety Administration probe, but they rebounded when the agency said it would not open an investigation on Thursday. The government agency told The Detroit News: “After reviewing all available data, the National Highway Traffic Safety Administration has not found evidence at this time that would indicate the recent battery fire involving a Tesla Model S was the result of a vehicle safety defect or noncompliance with federal safety standards. The agency continually reviews incoming and prior consumer vehicle complaints, as well as other data to identify potential vehicle defect trends and takes appropriate action as necessary.”
T = Technicals on the Stock Chart Are Strong
Tesla Motors stock has been exploding higher in the past several months. The stock is currently trading at all-time high prices and looks ready to continue. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Tesla Motors is trading slightly above its rising key averages, which signals neutral to bullish price action in the near term.