Tesla (TSLA) Soars After Confirming Profitability, Providing Breakout Entry

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01:20:30 pm on April 4, 2013

A few days ago shares of Tesla Motors (TSLA) staged a significant breakout move above previous resistance, sending the stock to all time highs.  Technically, this is an extremely bullish move for the stock and likely leads to further gains down the road.

The move came after CEO Elon Musk confirmed that yes the company will post a profit for Q1.  While the company already indicated this in their last earnings report, Wall St apparently liked the confirmation as well as the slightly better than expected sales of the Model S and pushed the stock to all time highs.

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Not long after that announcement, Tesla announced it is launching a leasing program in partnership with US Bank and Wells Fargo with the option (not obligation) to sell the Model S back to Tesla after 3 years at the same residual value percentage as the Mercedes S Class.  Tesla believes their leasing option gets its Model S in the hands of customers for less than $500/month.  The point of this article isn’t to go into the details of this news.  I recommend reading this article over at 24/7 Wall St which discusses the leasing in detail.

Most important, at least in the shorter term, is the impact on the stock price.  As I mentioned above, Tesla (TSLA) has staged a significantly bullish breakout to all time highs.  In the past few days it has pulled off that high to fill the gap.  This move is providing an outstanding 2nd chance entry point.   You can see the stock first broke out of a cup with handle base a few months ago and if you got in there, you weren’t shaken out of the stock and should still be holding.  This break to all time highs is more significant though and offers another opportunity.  The stock likely needs to digest a bit more with support in the 38 – 40 range.  That area is the ideal entry.

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Disclaimer: I currently don’t own a position in TSLA.

 

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Comments  

Been meaning to congratulate TSLA holders! I realized I had the comments turned off here and it’s been a long time since posting here at green stocks. Busy with other projects. Some new articles on the way focused on IPO’s!

For those that got in on this breakout, what are you doing with your position? Holding for the LONG haul or taking some profits? I see more room to run with a near term target of $200/share. Trend along 20dma remains very much intact.

 
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