With shares of Tesla Motors (NASDAQ:TSLA) trading around $174, is TSLA an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework.
T = Trends for a Stock’s Movement
Tesla designs, develops, manufactures, and sells electric vehicles and electric vehicle powertrain components. The company also provides services for the development of electric powertrain systems and components, and sells electric powertrain components to other automotive manufacturers. It markets and sells its vehicles through Tesla stores as well as over the Internet. Consumers and companies are looking to save at the pump, and what better way than with electric vehicles?
Tesla stock has taken a hit after the electric car maker was downgraded by R.W. Baird analyst Ben Kallo on Wednesday and a video of a Tesla Model S catching on fire after an accident was posted on YouTube. According to a statement from Tesla seen by USA Today, the fire did not reach the cabin of the vehicle and no injuries were caused by the accident. Kallo said his decision to downgrade the stock from Outperform to Neutral was caused by significant risks he sees the company facing in the next year-and-a-half, although he remains optimistic about Tesla long-term.
T = Technicals on the Stock Chart Are Strong
Tesla Motors stock has been a high flyer this year as it trades slightly below all-time high prices. The stock looks to be pulling back a bit, so it may need to consolidate after such a strong move. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Tesla Motors is trading above its rising key averages, which signals neutral to bullish price action in the near-term.