Tesla to Bounce?
In a note issued this week, analysts at UBS have upgraded Tesla to a buy following the recent plunge in price. Shares in Elon Musk’s iconic company are down around 45% on the year via a combination of broader tech stock weakness in the face of Fed tightening expectations, the impact of the recent Shanghai lockdowns as well as the impact of Musk’s botched Twitter deal.
However, UBS has now gone bullish on the stock citing a backlog of pent up orders, the opening of two new giga factories. Analyst Patrick Hummel also noted Tesla’s work in semiconductors and batteries as being superior to its peers, saying: “Tesla can outgrow peers with a combination of in-house cell capacity, its lead vs. global competitors in using LFP cells and its high share of directly sourced battery commodities, lithium above all.” Indeed, this bullish outlook was issued despite Hummel acknowledging the risks around Musk’s unpredictable behaviour, such as his controversial social media presence.
Technical Views
Tesla
The recent test of support at the 617.03 level has seen Tesla shares rebounding firmly with price now sitting back atop the 699.92 level. Recent price action looks to be carving out an inverse head and shoulders pattern, suggesting room for a fuller reversal higher near term. Above 777.11 the focus will shift to 904 next, in line with bullish MACD and RSI readings.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.