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Tesla Rally on Watch
Shares in electric vehicle maker Tesla have been on a solid run higher over recent weeks. The stock is up 30% this month alone, now up almost 100% off the YTD lows. A shift in Fed expectations has helped bolster support for the stock. With market pricing for Fed rate cuts through Q3 and Q4 rising in recent weeks, riskier stocks have enjoyed firm gain amidst a general uptick in risk appetite. Indeed, with the Nasdaq and S&P both at fresh highs, Tesla shares have now reversed initial 2024 losses and are trading back in the green for the year.
US Market Share Plunge
Despite the bumper price gains, the fundamental backdrop for the stock looks a little less encouraging. News came this week that Tesla’s market share for electric vehicles in the US has now dropped below 50% for the first time. With market share in China having fallen heavily over the last few years, this is a worrying development for Elon Musk’s flagship company. Tesla’s US market share over the last quarter now stands at 49.7%, down sharply from 59.3% over the same period last year.
Earnings In Focus
Tesla is also grappling with its broader recent performance. Quarterly earnings have been weaker-than-forecast for three consecutive quarters now, putting plenty of pressure on the group as it prepares to release its latest results at the end of this month.
Technical Views
Tesla
The rally in Tesla shares has seen the market exploding higher this month with price breaking above the 207.71 level and above the bearish trend line. The stock is now fast approaching a test of the 276.74 level. This is a key area for the market and a break here will open the way for a test of 313.11 next. Failure here will likely see some near-term rotation lower.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.