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Tesla’s Revenge, Plus Netflix, Amazon, Intel, GE, and Alibaba
Michael Kramer and the clients of Mott Capital Own Shares of TSLA and NFLX
What a wild ride for the shares of Tesla the past couple of days. We left here on Friday not knowing the fate of Elon Musk and the company only to learn over the weekend that he settle his lawsuit with the SEC. Shares of Tesla rose by about 18% today back to $310 regaining all its losses from Friday.
Electrek is reporting that Tesla hit a production mark of 80,000 cars in the third quarter. My gut says that Tesla is going to have a strong quarter. Analysts now see the company delivering a loss of $0.23 for the which is better than estimates from last week for a loss of $0.30. I expect that once we get final delivery numbers for the third quarter tomorrow or Wednesday, it will be revised higher again.
The stock fell below support on Friday dropping to around $260. Today, it climbed back above the support/resistance level around $301 and stayed firmly above it for the entire day. The next level of resistance comes around $325.
Reading The Markets Premium: A Look At GE And Tesla
Netflix had a strong day after Credit Suisse noted that content in 2019 should be much stronger than the current 2018 line-up of shows. Netflix is one of the first company’s to report results, and those results will come on October 16, so I expect to hear more from the sell-side on Netflix regarding price target adjustments, subscriber and revenue projections.
The stock has been rising steadily along an uptrend that formed back in mid-August. I don’t see a change in trend going into results. I expect that shares will be trading around $400 by the time the company reports results in 2-weeks time.
Intel fell today basically to where I expected it to drop when I wrote last Friday. So the trend is still higher at this point. I noted in an Investopedia article that I saw bullish options activity for expiration on November 16 at the $49 calls.
Amazon failed at resistance today around the price of 2,025. So the question now was that fill the gap reversal or a reversal from hitting resistance. Tough to say at this point. Tomorrow will be an important day for the stock.
GE made headlines announcing that John Flannery was out as CEO after only a year. The pace of change was moving to slow. But I think it is too soon to rush to any conclusions as to the potential impact of the move. The stock gave back a big part of its early morning gains. Perhaps if it can stay above the $11.85 support level, we can start to think about a change of trend, but at this point, I can not tell. Nor do I even think it is worth the gamble. Too many other worthy companies out there in far better positions.
The troubles for Alibaba continues, but perhaps there is a sign of hope emerging. Notice the RSI which may be shifting its trend from lower to higher. It may be too early to call a bottom in the stock price. But if the RSI can begin to diverge from the price that it is a potential a sign the bottom is near.
Michael Kramer is the Founder of Mott Capital and the creator of Reading the Markets.
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.
TSLA, NFLX, AMZN, GE, BABA, INTC