First up, the stock, bumping up against resistance for the third time:
The instanalysis of resistance lines is that each approach to the level absorbs more stock that sellers are willing to let go, eventually resulting in a situation where the selling stops and the stock pops (it doesn't always work but is worth noting where the levels are) . The reverse is also true in theory. A stock continually hitting a support level absorbs buyers' cash and at some point there is no more money available to purchase at that price and the stock falls.
As noted July 8 with the stock at $249.07: "Chartology: Tesla Stock Now Has A Very Wide Range To Churn Through (TSLA)". And September 5 A Word Of Caution On Tesla's Stock (TSLA):
Now don't get me wrong, I'm as much into Elon's/Baidu's/Nvidia's vision of flying cars and robotaxis as the next person and haven't changed this opinion on the company from April 24's "Tesla Q1 2024 Earnings Call Transcript (TSLA)":
...In pre-market action the stock is up $17.47 (+12.07%) at $162.15.
Below are the words that are adding billions ($50+) to the company's valuation.
Personally I think Musk is going to pull it off, but that's just me—perhaps informed by posting on the company and its stock since before the June 2010 share flotation (which, adjusted for the 5:1 and 3:1 stock splits gives a $1.133 IPO price)—however, there are plenty of other opinions to choose from if one doesn't care for that one....
Emphasis added.
However. There is a giant gap on the price chart, July 23 - 24 which exuberant buyers seem bound-and-determined to fill:
~$246 down to ~$225 with today's last trade at $231.62.
This could be setting up to be a "buy on mystery, sell on history" type of thing with the robotaxi unveil in October.
In the meantime, if one can step back from the minute-to-minute action the stock has been churning in that $180 to $260 range since July, alternatively wiping out shorts, then longs.
Well, the stock filled the gap without reversing and here we are right back at the top of the range. And here are some considerations to factor into the dreamscape.
Barron's, September 29: Tesla’s Delivery Numbers Are Due. Wall Street Has Taken All the Fun Out of It:
Wall Street’s obsession for uncovering any shred of data that might give it an edge in predicting outcomes has made Tesla’s quarterly delivery report a little less exciting over time.
Tesla is slated to report third-quarter delivery figures on Wednesday. They should be good. Just don’t expect a big positive reaction from the stock.
Wall Street has taken some of the fun and mystery from Tesla’s quarterly release with its obsession for uncovering any shred of data that might give it an edge in predicting outcomes.
Better, more reliable information, of course, is a good thing. What the evolution of analyst tracking means, however, is investors should pay more attention to the stock before delivery numbers are released. That is becoming more indicative of how things are going at the electric vehicle maker than the reaction to the actual delivery number.
Take first quarter delivery numbers. Tesla delivered about 387,00 cars, missing some of the lowest Wall Street estimates by about 10%. Shares dropped almost 5% after the disappointment. That’s not too bad considering the magnitude of the miss. But shares dropped almost 14% in the month coming into the delivery report, when analysts started to size up how the quarter was going.
Things turned out better in the second quarter. Tesla delivered some 444,000 cars. That was a little better than expected and much better than the first quarter. Share rose about 10%, but they rose almost 18% in the month leading into the delivery report.
Investors seem to have a better indication of how things are going to go than in the past. One reason: The Street is doing better. Analyst reports previewing Tesla’s quarterly deliveries now include references to app downloads, weekly car registration data in China, monthly car sales in the U.S. and Europe, and vehicle identification numbers from U.S. assembly plants, among other things.
The goal is to produce an estimate as close as possible to the actual outcome, which should lower stock volatility and give analysts with the best estimates bragging rights.
Beyond anecdotes, there is some evidence analysts are getting more accurate. In 2018 and 2019, analyst estimates missed Tesla delivery numbers by about 5% on average. That number is down to about 4% over the past two years.
One consequence of better estimates appears to be Tesla stock reacting more ahead of delivery release. If deliveries miss, the stock is more likely to be down in the month leading into the result than it is the day after the report.
That kind of trading action shouldn’t surprise investors too much. The stock market is always forward-looking, with investors reacting to changing estimates, and what they hear from analysts, heading into any delivery report.
Coming into Monday trading, Tesla stock has rallied about 22% over the past month. So third quarter delivery numbers should be fine. Most of the Wall Street preview reports indicate sales are up from the same time a year ago, partly on the strength of Chinese deliveries....
....MUCH MORE
And from Investor's Business Daily, September 28 a very deep dive:
Tesla Nears Breakout As Deliveries, Robotaxi Event Loom; BYD Races Through Buy Points
Tesla (TSLA) and BYD (BYDDF) are the world's largest electric-vehicle makers.
In 2022, China EV and battery giant BYD's vehicle sales raced ahead of Tesla's and are now well more than twice as high. For all-battery electric vehicles (BEVs), BYD seized the crown in Q4 2023. However Tesla has regained that title in 2024.
Third-quarter sales are due for Tesla and BYD in early October.
Tesla earnings have tumbled for several quarters, missing lowered views most of the time. CEO Elon Musk is placing more emphasis on robotaxis and robots, with a robotaxi event set for Oct. 10.
Tesla has relied on price cuts since late 2022 to offset weaker demand due to an aging lineup and rising competition. New "affordable" EVs may be coming, but they may be variants of existing models.
BYD has also cut prices, but margins remain high. Sales are rising thanks to a next-generation hybrid system and a variety of new and refreshed models. It recently opened its first full assembly plant outside of China, with several more overseas plants coming.
Tesla stock round-tripped a huge gain amid the Q2 earnings miss, but is running back toward a buy point. BYD stock has surged to a 52-week highs, clearing multiple buy points.
Tesla delivered 443,956 EVs in Q2, beating lowered estimates. That was up sharply from Q1's 386,810 vehicles but down from Q2 2023's 466,140.
Along with delivery numbers, Tesla reported record energy storage deployed in Q2.
BYD announced record Q2 sales of 986,720, up 58% vs. a year earlier and 40% vs. Q1's 626,236 EVs. It's also double Tesla's Q2 total.
However, all Tesla vehicles are BEVs, while more than half of BYD sales are plug-in hybrids now. BYD delivered 426,039 passenger BEVs in Q2.
Tesla will report Q3 deliveries and energy storage figures on Oct. 2. BYD will release Q3 sales figures in early October....
....MUCH MORE
One quibble. The line "Tesla has relied on price cuts since late 2022..." reads like a bad thing but the fact of the matter is that the entire industry has been cutting prices and Tesla getting out in front of that reality has kept them competitive in the battery-electric-vehicle business.
As we've been saying for quite a while now, Mr. Musk saw something a couple years ago that led him to a) the price cuts and production efficiencies that are proving crucial to survival in not just EV's but in the wider automobile market as well. Volkswagen talking about possibly laying off 30,000 of their German employees was been inconceivable five years ago. And b) whatever it was he saw also led to the emphasizing things they been working on for a decade: robotaxis and AI and supercomputers and robots.
So, for patient reader, having read this far, here's my two cents worth:
Deliveries will be in-line this month and the next few months and the robotaxi unveil will be written up as a bust. The people who write the headlines hate Elon Musk and nothing he does will ever, ever change that. The financial question is: will the self-driving taxis be contributing to sales and earnings in two years?
Based on the fact that Waymo is now booking 100,000 rides per week I think the answer is yes but your mileage may vary. To repeat the comment on the April earnings call transcript:
Personally I think Musk is going to pull it off, but that's just me—perhaps informed by posting on the company and its stock since before the June 2010 share flotation (which, adjusted for the 5:1 and 3:1 stock splits gives a $1.133 IPO price)—however, there are plenty of other opinions to choose from if one doesn't care for that one....
In late pre-market action the stock is trading up $1.17 (+0.45%) at $262.80 after closing Monday at $261.63 also up $1.17 (+0.45%).
