WWM - Analytics


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    Tesla’s delivery guidance drives sends shares soaring


    Tesla Motors Inc. (TSLA) raised their delivery guidance and shares soared in after-hours trade. The company disappointed on the headline fourth quarter figures, but the 2016 delivery forecasts of 80-90K car deliveries drove the major rally.

    Tesla reported a fourth quarter loss of $0.87 a share, which includes a $17 million dollar loss due to FX revaluations. The headline miss initially drove shares lower as the analysts’ consensus eyed a profit of $0.07. Revenue printed at $1.75 billion, much lower than estimated $1.78 billion.

    The company’s shares were up over 13% to $163.30. Price action on the Tesla 30-minute chart show that the initial knee-jerk reaction formed a bullish butterfly pattern with the $135 low. Price is also breaking out above the downward sloping resistance line that has been in place since February 1st. If the bullish rally continues, the next major resistance level may come from the May 2014 support level of $177.

    Today’s move might be enough to squeeze out short sellers, of whom piled on the highest amount of bearish bets since the company’s IPO in 2010. Major support will come from the $130-135 zone.

    The Trade: Buy Tesla shares at $160, with a stop loss of $155 and take profit of $175. The risk/reward ratio is 1:3.    

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