Tesla Inc (TSLA) stock surged by another 4% on Monday as investors anticipated the company’s next earnings report, which is set for Wednesday after the bell. CEO Elon Musk’s TED Talk probably also had something to do with it, given that he suggested that Tesla Inc (TSLA) drivers may soon be able to fall asleep at the wheel safely two years from now.
Technician: buy Tesla stock ahead of earnings
Chart technician Todd Gordon of TradingAnalysis.com told CNBC‘s Trading Nation today that he likes how Tesla Inc (TSLA) stock is “acting into earnings, and he feels that the record run is likely to continue for some time. He described Tesla Inc (TSLA) stock as moving upward in a “parallel channel” starting in December. He explained that today’s 3% increase helped Tesla Inc (TSLA) stock bust through what he said was a “$315 resistance.”
He feels that the shares may rally on the company’s earnings to reach the top line of that channel, if Wednesday’s earnings report is in line with expectations. If the company meets expectations, he predicts that Tesla Inc (TSLA) stock could move toward $330. To capture the possibility of a strong week, Gordon bought a call spread consisting of buying the 320-strike call and selling the 325-strike call expiring on Friday.
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He’ll see the biggest profit off this call spread if Tesla Inc (TSLA) stock ends this week at or above $325.
Tesla stock also riding on Elon Musk’s TED talk
Much of today’s rally could be attributed to Musk’s TED talk on Friday, in which he spoke on various topics, including Tesla Inc (TSLA)’s Autopilot system. The company has gotten a lot of flak over Autopilot, but Musk claims that in “about two years,” drivers will be able to sleep soundly at the wheel of their Tesla Inc (TSLA) when the vehicle sets off on a trip and wake up later when they reach their destination. That’s a pretty tall order, and it’s one that probably won’t stand up to regulations because it seems very unlikely that in only two years, regulators will be ready to allow drivers to sleep while their car drives itself autonomously.
Elon Musk also said that in November or December, they will show that a Tesla Inc (TSLA) vehicle will be able to make a trip from New York to Los Angeles entirely on Autopilot without any assistance from a driver. This is something he’s been talking about for quite some time, and this could be more realistic. He also claims that the vehicle will be able to do this while also adjusting its own route in real time rather than having a route programmed in. Further, he claims that Autopilot will be able to adjust to a sudden destination change.
Elon Musk’s full TED talk is embedded at the end of this article.
And Tesla’s biggest competitor is…
Indeed, autonomous driving is arguably the hottest automotive niche right now, and it’s so big that Morgan Stanley analyst and Tesla Inc (TSLA) stock perma-bull Adam Jonas feels that the company’s biggest competitor probably isn’t other automakers. In a note dated April 28, Jonas — who still has his price target at $305 and rating at Overweight despite the run in the shares — highlighted the growing list of companies with permits to test autonomous vehicles in California. That list includes not only Tesla Inc (TSLA) and other automakers such as Volkswagen and Nissan, but also big tech names such as NVIDIA, Uber and Apple. He said the last eight permits issued by the California DMV were not auto firms, which demonstrates that it isn’t just automakers with a stake in the autonomous driving game.
Tesla Inc (TSLA) stock soared to a record high of $327.25 during regular trading hours on Monday.