Tesla outperformance in focus
Last week the tech-heavy Nasdaq dived 5.77% after hotter-than-expected inflation data and a profit warning from FedEx that fuelled concerns over a recession. Despite the widespread carnage, Tesla remarkably finished last week 1.22% higher at $303.35.
Share this:
Last week the tech-heavy Nasdaq dived 5.77% after hotter-than-expected inflation data and a profit warning from FedEx that fuelled concerns over a recession. Despite the widespread carnage, Tesla finished last week 1.22% higher at $303.35.
Tesla’s outperformance began as outlined in our last trade idea on Tesla in July here, after it delivered strong double-digit growth in sales and profits during the second quarter reporting season, despite facing supply chain problems and Covid-19 disruptions in China.
On August 24, the company executed a 3-for-1 stock split, which further helped support the stock. A stock split generally brings down the stock’s price, attracting a broader range of buyers.
Finally, the recently approved Inflation Reduction Act has placed more attention on the electric vehicle (EV) industry. The law is the most significant investment into addressing climate change in the history of the US and is expected to help the U.S reduce its greenhouse gas emissions by 50% below 2005 levels by 2030.
Ahead of the much-hyped FOMC meeting this week, we would not usually look to add new positions to trading portfolios. However, if there were a stock I was looking to buy, Tesla would again be front and centre.
The share price of Tesla is trading above the 200-day moving average, currently at $293, but below the recent double top $314 area.
To take advantage of expected continued outperformance, use dips back to the 200-day moving average at $293 with a stop loss at $263, below the September low. The target is a push to $350, providing a trade with a 2:1 risk-reward ratio.
Source Tradingview. The figures stated are as of September 19th, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
How to trade with City Index
You can trade with City Index by following these four easy steps:
- Open an account, or log in if you’re already a customer
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
- Search for the company you want to trade in our award-winning platform
- Choose your position and size, and your stop and limit levels
- Place the trade
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
AUD/USD Bulls Fight Back After Australian Jobs Shock
AUD/USD has been hit by another ugly Australian employment report, sending RBA rate hike expectations sharply lower. Yet the relationships driving the currency have shifted since quarter-end, and improving risk appetite could provide the fuel for a recovery.
Bitcoin Bulls Eye Weekend Bounce as Nasdaq Finds Support
Bitcoin bulls eye a weekend bounce as Nasdaq finds support, BTC holds $80k and bullish reversal signals emerge alongside stronger correlations.
Dow Jones Analysis: Is the DJIA Making a Comeback?
Recent trading sessions have become increasingly relevant for the Dow Jones, as the index has started to regain bullish momentum heading into the end of the week. Over the last three sessions, the DJIA has advanced by more than 0.6%, allowing buying pressure to regain prominence and raising the possibility of a more consistent short-term recovery.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.