Technology

Tesla Motors Inc (TSLA): No Missteps Allowed

Tesla Motors Inc (NASDAQ:TSLA) is moving quickly to make sure that the gigafactory is ready to go when the Gen III car is. The reason for this is very simple. As Tesla CEO Elon Musk told CNBC, their main focus right now must be on making sure that the gigafactory is ready to go when they’re ready to start mass producing the Gen III car.

Tesla Motors Inc (TSLA): No Missteps Allowed

Tesla’s gigafactory is key

Musk notes that designing the car and then tooling up so that they can produce the rest of the car are big expenses. However, if they do all of that and then don’t have any batteries to put in the car, he says “it would be a terrible outcome for Tesla.” Musk thinks the automaker might even fail if that happens.

Needless to say, that demonstrates how big of a risk it is to invest in Tesla Motors Inc (NASDAQ:TSLA) right now, particularly at the company’s high valuation. So is it really worth the risk? Of course it depends entirely on who you ask.

Tesla to be either a colossal hit or a colossal failure

Writing on Yahoo Finance, Lawrence Lewitinn shares the views of Chantico Global founder Gina Sanchez. She says she’s worried about the valuation right now but thinks that if Tesla Motors Inc (NASDAQ:TSLA) does execute everything perfectly, “it’s going to hit big.” In fact, she said a multiple of 200 times forward earnings might not even be enough.

She notes that the automaker is going to have to meet all of its targets or building gigafactories and putting Supercharger stations in place in order for its stock to be “successful.” She said it’s a big challenge for any company to be “priced to perfection,” as she says Tesla Motors Inc (NASDAQ:TSLA) is. She’s not the only one who made comments about Tesla being priced to perfection. We heard similar thoughts from analysts from RGA back in September when the automaker’s stock was trading at less than $170 a share.

Suggestions for short-term Tesla traders

Lewistinn points to suggestions from Auerbach Grayson strategist Richard Ross for how short-term investors can get in on the action. Ross notes that Tesla Motors Inc (NASDAQ:TSLA) stock has seen resistance in the downtrend since hitting its peak in February. However, he says the automaker has been sticking to its 200-day moving average “almost to the penny.”

Tesla Motors Inc (NASDAQ:TSLA) did dip in May, but the stock has bounced back, surpassing what he says is “short-term resistance around the $220-per-share level.” He thinks that this price level will offer some support in the near term in cash Tesla shares pull back at some point.

A pattern in Tesla’s long-term chart

Ross also sees a pattern in Tesla Motors Inc (NASDAQ:TSLA)’s long-term chart, suggesting that it could be useful for technical traders. Once again, he points to the 200-day moving average, saying that it has “provided very nice trading signals on a number of occasions.” He said those who like Tesla’s story also like its stock, but they don’t have much of an appetite for risk. As a result, he suggests holding a small position and not selling until it falls under the 200-day moving average, which has remained the same for nearly two years.

The strategist also said that since three tests of this average since September, Tesla Motors Inc (NASDAQ:TSLA) stock has been advancing strongly.

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  • Renu Bisht

    Tesla Motors rises.

  • lookOatOme

    How to tie in part-time solar energy, with the local transformer on your street, is the point I’m making. Space tourism, doesn’t address this issue, nor does the hyperloop. Distributing electricity is the conversation Elon Musk is not having. Storage is only part of the equation.

  • Satariel

    I saw a deer go poo poo and make little balls in the grass.

  • Robert Fahey

    Go outside and look upward. See that hot ball in the sky? You can’t miss it. That’s the “real actual” electric grid solution.

  • lookOatOme

    ‘Colonies on Mars – Space Tourism – Hyperloop!’. Elon is all over the Tesla map, without a compass.
    The most important subject deleted from Mr. Musk’s prime time affixation, is a real actual solution on improving the existing electric grid, that his cars will be burdening.
    I’m content, without adding to my small TSLA position. Elon invest talk in superconductor wire!