Tesla (TSLA) – Get Tesla Inc report Shares were relatively quiet in premarket trading on Thursday, rising a few percent after the electric-vehicle market leader reported earnings after Wednesday’s close.
The Austin company’s second-quarter earnings beat estimates but missed revenue estimates, even as its sales rose more than 40% from a year earlier.
Revenue was also lower than the first-quarter figure, but the shutdown in China helped explain the slowdown.
Tesla has also reduced its majority stake in Bitcoin, which could affect the cryptocurrency sentiment. It was down about 3% on the day. Still, CEO Elon Musk said the company plans to buy back its bitcoin stake.
Regardless of the automaker’s stance on Bitcoin, it doesn’t matter for the stock price — at least today. Shares are now accelerating their gains, up about 7% at the last check.
The move was enough to push Tesla above hard resistance.
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The $760-$770 area has been resistance for several weeks. Every rally in the area has been sold.
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While Tesla stock wobbled around its 10- and 21-day moving averages — as if the benchmarks didn’t exist — it also made a series of higher lows.
This bullish development is similar to what we saw at Netflix (NFLX) – Get Netflix Inc. Report We saw a similar post-earnings reaction ahead of the earnings report earlier this week.
Going into Wednesday night’s print, Tesla had risen for six straight sessions. If the bears are in control, they will defend the $760-$770 area.
Now Tesla stock is heading higher, and it’s battling a June high near $793. How the stock can benefit from here is fairly straightforward.
If the June high is resistance, the previous resistance needs to act as support between $760 and $770. Some help for 10 days will be an added bonus for the bulls.
If Tesla stock can break out of the June highs, it will play two key upsides.
The first target is the 10-month moving average currently near $835. The second target is $885 to $900, where traders will find the 50% retracement and the 200-day moving average.
Remember what Tesla means to the market as a whole. With a market cap of more than $800 billion, it’s an important stock for its size, but even more so from a sentiment standpoint, especially when it comes to growth and tech stocks.
If Tesla does well, we could be in a risky environment for the time being.