Company earnings announcements sometimes do provide us with some nice surprises…
We have seen yesterday that following Tesla’s earnings report the share price is up 9% in pre-market trading. This was (until now), one of the few times the stock might end up higher following the earnings annoucnment in the last couple of years. You can read more on this in our previous article here.
The major highlights of the report which helped in performance were lower than expected negative free cash flow (-$740 million actual vs -$900 million expected), a revenue slightly beating the consensus and a minor gross margin on Model 3 cars. Tesla also re-iterated a strong forward guidance to hit profit without the need to raise additional capital during the year. A more convincing, gentle and ‘CEO’ like answers from Musk, who also apologised to one of the analysts following issues in quarter one generated more momentum for the stock.
As those of you who followed this stock know, Tesla is considered very volatile, fundamentally speaking is quite weak and from a technical stand point it might not be very clean to analyse it. With this however there might be opportunities for short term trading.
Above is a quick chart (daily) showing the price against various indicators (you can find more information about these in our manuals section). When considering the current upturn, one might be tempted to go long as there is still more room to get closer to the resistance level.
What do you think? How are you positioned? Let us know in the comments section below!