Tesla published the quarterly report on April 20 after the closing of the trade session. As in most cases in recent years, the results have exceeded the expectations of the market participants. However, for investors the good numbers of the past quarter often become an opportunity to fix profits, as a result, we see the paradox: the great report and the falling prices. What will happen with shares this time?
To prove the status of “growth company” Tesla should maintain the quite high increase of its operational and financial indications. While it succeeds: for the last quarter, revenue has increased by 81% to $ 18.75 billion (at a forecast of $ 17.63 billion). The earning per share has shown + 246% growth to $ 3.22 (at a forecast of $ 2.24). Delivery of cars for the quarter has exceeded 310 thousand pcs (+ 68%).
In current economic conditions, the forecasts are equally important (and even more important, because reports describe the events that have already happened). And Elon Musk hasn't disappointed us: they plan to manufacture at least 1.5 million cars during 2022 (earlier it had expected 1.4 million). Also, the launch of an unmanned taxi is planned for 2024. The potential absence of a driver can significantly reduce the cost of travel and create a huge demand for Tesla cars by taxi operators.
During the trading session on April 21, the growth of Tesla’s share has been increasing 11%, but at the end of the day, the wave of selling has fallen and the final growth couldn’t exceed 3,5%. The general weakness of shares included in the NASDAQ index hinders Tesla to show more robust growth. Nevertheless, the last week of April is ahead, and this means, the possible "turn of the month" effect that involves the growth of the market the last days of one month and in the first days of the next one. It will be difficult to achieve the April highs, but targeting yesterday's peak near 1090 is quite possible.
The following trading strategy options can be suggested:
Buy Tesla at the current price. Take profit 1 – 1040. Take profit 2 – 1060. Take profit 3 – 1085. Stop-loss – 970.
Also, traders can use a Trailing stop instead of the fixed Stop-loss at their disposal, when the price moves up.