The strength in Tesla stock has caught the attention of atechnical stock market analyst, who sees potential for more gains ahead.
Shares of the electric-vehicle maker dropped 0.6% on Wednesday, closing at $349.60, while the S&P 500 and Dow Jones Industrial Average rose 0.2% and 0.3%, respectively.
It was a small drop following three days of gains that added 10% to the stock price. Tuesday’s $351.67 close was the highest since late May.
“Tesla is currently in the midst of building a four and a half year BIG BASE,” wrote John Roque, head of technical strategy at 22V Research, on Tuesday.
A base is essentially a period of sideways trading where the market digests prior gains. It can serve as the platform for a move higher.
With the stock above its 12-month moving average, “the current setup for Tesla is reminiscent of the six-year BIG BASE that occurred from 2014 to 2019…. Tesla also carved out a two and a half year BASE from autumn 2010 to spring 2013,” Roque noted. Both bases served as launch points for big gains in the subsequent years.
Roque isn’t making a fundamental call on Tesla stock. He’s looking at stock charts and market history to understand investor sentiment and what might come next for shares. “With only two prior examples, I don’t want to go overboard,” added Roque, but based on Tesla’s history, he likes the setup.
What, fundamentally, could move shares higher is a good question. RBC analyst Tom Narayan says investors are getting more excited about humanoid robots. He has been fielding more client questions about that opportunity.
Tesla plans to sell significant quantities of AI-trained humanoid robots in 2026. CEO Elon Musk believes robots represent a huge opportunity for the company. He isn’t alone. Nvidia CEO Jensen Huang believes robotics will be one of the largest industries in human history.
The problem, Narayan points out, is that the humanoid robot industry is in its infancy. It’s currently impossible to reliably project volumes and profits for any company.
For now, investors are pleased with potential.
Narayan rates Tesla stock Buy and has a $325 price target for the stock. That is a little below where it trades, but shares started in August below $310 each. Sometimes, Wall Street has trouble catching up with the EV maker’s market moves.
Coming into Wednesday trading, Tesla stock was down about 13% so far this year and up about 68% over the past 12 months.
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