Tesla, Inc. (TSLA) reports earnings Wednesday after the closing bell, with analysts looking for a loss of $0.28 per share in the second quarter of 2020 revenue of $5.31 billion. The electric vehicle (EV) manufacturer lost ground despite reporting an unexpected first-quarter profit in April, but recovered quickly, participating in a historic momentum of the wave which has posted a record high of $1,795 July 13. Tesla stock is currently consolidating these impressive gains, trading about 150 points below the high ridge.
- Tesla stock is near all-time ahead of Wednesday, reports liberation.
- Speculators are looking for the EV manufacturer to report record second quarter deliveries.
- An earnings shortfall could trigger a significant decline, because the stock is priced for perfection.
Earnings expectations are extremely high, with the recent rumors insisting on the fact that Elon Musk and the company will report record second quarter deliveries, the first step that he uses to measure the growth because of high debt levels and a long string of losing quarters, which were eventually broken by the first quarter of the upside surprise. This makes evaluation extremely difficult, requiring the pathologists to be paid by Tesla filed with the SEC to assess its actual growth curve.
The analysts are also of the difficulty to gauge Tesla, the intrinsic value due to the construction automotive has a long-standing reputation as a highly cyclical industry, the consumption to increase sales during periods of economic expansion and reduced during recessions and recoveries. Traditional manufacturers are sounding the alarm in this regard, the reports of sagging sales, which forced to idle plants and lay off workers.
Tesla stock is priced for perfection headinge in this week’s confessional, raising the odds for a sell-the-news reaction if the expectations are not met. However, the market’s most popular names have been engaged in a dynamic wave since the month of March from the sale of the highest point, when thousands of new traders have used government stimulus checks to open the accounts committee free of charge. It is not wise to under-estimate this liquidity pocket, which is perfectly capable of lifting Tesla stock above$2,000.
What Is The Assessment? Evaluation is the process of analysis to determine the (or the) of a value of an asset or a business. There are many techniques used to make an assessment. An analyst to place a value on a company is reviewing the business management, the composition of its capital structure, prospect of future earnings, and the market value of its assets, among other measures.
Tesla’s Weekly Chart (2017 – 2020)
A multi-year uptrend topped out just below $400 in the second quarter of 2017 and softened in a trading range, with support below at$ 250. The stock has broken the range support in May 2019 and entered into a sharp decline that ended at a two-year low in June. This fall has completed the sale of climax, leaving in its place a powerful advance that the reassembly of the broken support in the fourth quarter. Stable upside reaches range resistance in December, the immediate generation of derivation that has generated a great impetus to the interest of the buyers.
Heavy short-covering drove the first wave of the rise, which has added nearly 600 points in seven weeks before stalling just below $1,000 in February 2020. A failed escape attempt, has completed a small double top at the end of the month, with an immediate sharing of the give up to 100% of the rally gains before declining to $350 in mid-March. The subsequent impulse purchase is completed an Elliott five-wave advance in $870, 1 May and eased into a triangle consolidation, which resulted in the beginning of June, the escape.
The history of the upward trend has culminated with a six-day rally wave that has added almost 1000 points in the July 14 all-time high at $1,795. The stock reversed during the session and settled around the $1,500 for a week before turning sharply higher Monday, adding 142 points. It is trading slightly down on Tuesday morning, but the speculators could return at any moment, driving the stock in the state of the high in advance of the publication of the results.
What Is The Elliott Wave Theory? The Elliott Wave Theory was developed by Ralph Nelson Elliott to describe the movements of prices on financial markets, in which it was observed and identified recurring, fractal wave patterns. The waves can be identified in stock price movements and in consumer behavior. Investors try to take advantage of a market trend could be described as “riding a wave.”
The Bottom Line
Tesla stock is back in rally mode ahead of Wednesday’s after-market earnings report, with speculation that the EV manufacturer to report record second quarter deliveries. It is currently priced for perfection, so a lack of profits or other less-than-spectacular news could trigger a high percentage of decline, which cut through the $1,500 level.
Disclosure: The author held no positions in the aforementioned securities at the time of publication.