Tesla stocks are poised to rise after correction

Tesla's market value has fallen over the past two months from its December peak to a technical support zone at levels of $250 to $270 per share.

Tesla's strong strengthening in November-December last year, as well as the strong decline that followed, was caused partly by the euphoria of Trump's election and Musk's appointment as a member of the president's team, and the subsequent rejection of many of Musk's initiatives. That is, many reasons of rise and fall of stock prices were opportunistic in nature, not connected with fundamental factors determining capitalization of the company.

And if one looks at the company without excessive political prejudice and emotions, after such significant correction of stock prices it has a very good potential for further growth. Earnings per share (EPS) is expected to be 32.7% next year and 27.4% in the next 5 years. The current return on equity is 10.5% and return on investment is 8.56%. The company's gross margin for last quarter is 17.8% and net income is 7.30%.

In many ways, Tesla's economic performance continues to be well above the U.S. stock market averages. According to the market model for determining a fair price based on the company's fundamental valuations, the company's target stock price is $379 per share.

If one looks at Tesla stock prices from a technical point of view, just at the level of 380 is the first strong resistance, to which the price is likely to strive. But for such a move up, it is likely to require consolidation in the range of $250–300 per share, which may last one or two months.

The overall recommendation is to buy Tesla stock.

Profits should be taken at the level of 380.00. A Stop loss could be set at the level of 195.00.

The volume of the opened position should be set in such a way that the value of a possible loss, fixed with the help of a protective Stop loss order, is no more than 1% of your deposit funds.