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Tesla Gap Higher on Supercomputer Boost

By Capital.com News

11:00, 14 September 2023

Any material provided is for information purposes only and is not investment advice. Any opinions that may be provided are not a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided. If you rely on the information on this page then you do so entirely on your own risk.

Tesla's share price gapped higher on Monday after investment bank, Morgan Stanely said Tesla’s supercomputer, known as Dojo had the potential to boost its market cap by $600 billion.

Dojo's production began in July, and Tesla plans to invest over $1 billion in it by next year. The supercomputer could create new markets beyond vehicle sales, particularly in applications where real-time visual decision-making is crucial.

Morgan Stanley upgraded Tesla to "overweight" and raised their 12-18 month target by 60% to $400, projecting a market cap of around $1.39 trillion, compared to the current value of about $789 billion.

Technical outlook

Monday’s price gap has given the stock a boost of bullish momentum, aligning with the ascending channel that has been in place since mid-August.

On the 4hr candle chart (below), we can see that price action following Monday’s gap has seen the shares consolidate within a compact triangular bull flag pattern.

This pattern of bullish consolidation suggests the likelihood of a short-term trend continuation, hinting at the possibility of prices moving higher and eventually closing the significant negative gap that emerged on July 20th following the release of Tesla's Q2 results.

Tesla (TSLA) 4hr Candle Chart

snapshot

Let's take a look at the bigger picture by switching to the daily candle chart (below).

US100

19,526.60 Price
-1.140% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 7.0

ETH/USD

3,502.80 Price
-0.750% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

Gold

2,401.36 Price
-1.830% 1D Chg, %
Long position overnight fee -0.0198%
Short position overnight fee 0.0116%
Overnight fee time 21:00 (UTC)
Spread 1.20

BTC/USD

66,965.10 Price
-0.740% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

Here, we can see that the stock has been on an upward trend since the start of the year, with prices consistently staying above the 50-day and 100-day moving averages.

This longer-term view supports our positive short-term outlook on the 4-hour candle chart.

Tesla (TSLA) Daily Candle Chart (YTD)

snapshot

Risk management

Traders looking to take a long position in Tesla could enter on a breakout from the small bull flag which has formed on the 4hr candle chart.

A logical area for stop placement is below the bull flag low, while a reasonable area for initial profit targets could be the top of the July 20th gap.

Tesla is a volatile stock and traders should check the economic calendar prior to taking a position.

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Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

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