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Tesla Inc (NASDAQ:TSLA) rally this year has not peaked and the stock could reach a breakout level of $716, according to Fairlead Strategies founder Katie Stockton, Business Insider reported Wednesday.
What Happened: Stockton based her outlook of the Elon Musk-led company on recovery seen in the shares of iShares MSCI USA Momentum Factor ETF (BATS:MTUM) in a note to clients.
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As momentum stocks rise, Tesla is also reaping the benefit of the uptrend. The analyst said in her note that the ETF has touched new all-time-highs after underperforming the broader market in both October and November, as per Business Insider.
“The ratio [momentum stocks versus S&P 500] has room to resistance, supporting additional near-term outperformance by MTUM's holdings, the largest of which is Tesla,” wrote Stockton.
Should momentum stocks touch new highs, they should “foster positive momentum [for Tesla] with a targeted level of $716 from the breakout,” according to the analyst.
Why It Matters: Tesla stock has soared 622.49% on a year-to-date basis, while Momentum stock has gained 23.53% in the same period. The S&P 500 has returned 13.68% YTD.
Tesla makes up 6.23% of Momentum’s portfolio, the market value of those holdings is 803.87 million approximately.
This week, Tesla reached an equity distribution agreement with major investment banks such as Goldman Sachs Group Inc (NYSE:GS), Citigroup Inc (NYSE:C), and Credit Suisse Group AG (NYSE:CS) to sell up to $5 billion in shares.
Wedbush analyst Daniel Ives termed the sale a “smart move” and said the automaker is “raising enough capital to solidify its growing cash position.”
Price Action: Tesla shares closed nearly 7% lower at $604.48 on Wednesday and fell 2.23% in the after-hours session to $591.02. On the same day, Momentum ETF shares closed 2.45% lower at $155.11.
Related Link: JPMorgan Says Tesla's Valuation Is 'Difficult To Conceive In Any Imagined Scenario'
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Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.