It took a while, but Tesla stock has eliminated the overhang from CEO Elon Musk's pay drama. Shareholders are happy the stock is up. The question now is what's next?
Tesla stock was just above $170 a share shortly before Tesla shareholders voted convincingly to re-approve Musk's massive pay deal that awarded him some 300 million incentive-laden stock options. They have climbed since then.
Shares closed at $197.42 on Thursday, up about 0.5% while the Dow Jones Industrial Average and S&P 500 were flat.
Wedbush analyst Dan Ives estimated the pay overhang was worth $20 to $25 a share, which is one reason investors were a little surprised the stock closed at $178.01 a couple of days after voting results were known.
Now shares are up roughly $25 from pre-vote levels, so Ives looks right. The near-$200 level also lines up with recent stock resistance.
Technical stock market analysts look at charts and chart patterns to get a sense of where any shares will trade over the short and medium terms. Resistance levels represent prices stocks have trouble punching through, perhaps because investors tend to take profits at that price.
Failing at a resistance level means a rally can run out of steam. Breaking through resistance, on the other, hand is a bullish sign.
If Tesla can pierce $207, the next stop looks to be $220 to $225 says Fairlead Strategies analyst Will Tamplin. The $207 level is essentially the 200-day moving average for Tesla stock.
What will get Tesla through that level is likely delivery results. Tesla is slated to report second-quarter car deliveries on July 2. The current Wall Street estimates project about 420,000 cars sold. That's down about 10% from a year ago. A lack of growth isn't great, but Tesla stock was already down roughly 20% year to date, through early trading.
Beating expectations would show investors things aren't quite as bad as feared.
If Telsa deliveries disappoint, support for the stock is around $170, Tamplin adds.
Whether deliveries will beat or miss is tough to say. Tesla is having a strong end of the quarter in China. It sold more than 17,000 vehicles in China this past week, according to Citi analyst Jeff Chung, who tracks industry data for many auto makers.
That's a big week. Another week in that range could bring second-quarter sales in China to between 145,00o to 150,000 cars. That would be down about 5% from a year ago. Down, but less than what current estimates imply for Tesla's second-quarter deliveries.
Comments