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Tesla Motors Inc Shares Set To Test Key Support At $230

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Tesla Motors Inc Shares Set To Test Key Support At $230
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Tesla Motors Inc (NASDAQ: TSLA) shares have frustrated under-exposed investors since early 2013 by rallying seemingly unabated from $35 to nearly $300. The nagging thought that they would be buying at the top kept many bulls on the sidelines.

Well, now the stock is offering the 20-percent pullback bulls have been waiting for.

What The Bulls See

  • The bulls love Tesla's great long-term growth story, which hinges on the continued game-changing innovations coming from Elon Musk and others at the company.
  • An estimated growth in revenues for 2015 of 57 percent, along with more than 200-percent estimated earnings growth.
  • A technically-strong stock, as long as support at $230 holds up.

Related Link: Apple Inc. Looks To Hold Up Above Support While The Market Rattles Around

What The Bears See

  • A valuation (80 times 2015 earnings estimates; price-to-book of more than 30; and price-to-sales of more than 13) that prices in perfection, making it imperative for the company to execute perfectly and never disappoint.
  • A stock that technically is weakening short-term and that could easily turn outright bearish with a break of the $230 level.

Technical Take

Technicians note that Tesla is on the verge of testing its long-term uptrend line support at around $230. If that level of support is broken, they feel the intensity of the selling in shares is very likely to pick up. The next level of support below the uptrend line could come in at the horizontal line at $211.56. Should the $230 support level hold up, however, technicians note that Tesla could turn back to the upside and make a run toward the upper edge of the uptrend channel near $350.

Stock chart: 
Stock chart

Posted-In: Elon Musk TeslaLong Ideas Technicals Movers Trading Ideas Best of Benzinga

 

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