Tesla Shares Surge Following Strong China Sales Data and Positive Analyst Outlook
Tesla's stock price climbs significantly after impressive March sales figures from China and Goldman Sachs reinstates coverage with a Buy rating.
Goldman Sachs has resumed coverage on Tesla, Inc. (TSLA) with a Buy recommendation and a price target of $864.
Tesla shares surged over 3% on Wednesday, fueled by data revealing a remarkable 450% increase in vehicle registrations in China from February to March. According to LMC Automotive, registrations soared to 12,709 in March, up from just 2,314 the previous month.
Recently, Tesla launched two new Model 3 variants produced at its Shanghai facility: a long-range and a performance edition. These locally manufactured models are offered at lower prices compared to imported versions, potentially driving higher sales volumes.
Analyst Mark Delaney from Goldman Sachs highlights Tesla's strong product leadership in the electric vehicle (EV) sector, a market expected to experience sustained long-term growth. Delaney also emphasizes that Tesla's current valuation is attractive relative to its revenue expansion.
Meanwhile, the automotive industry faces challenges as Ford Motor Company (F) reported a disappointing first-quarter outlook, with unexpected cash burn due to idle manufacturing plants. As other automakers release their updates, the sector may encounter further volatility before rebounding.
From a technical analysis perspective, Tesla's stock continued its upward momentum over recent sessions. The Relative Strength Index (RSI) approached overbought territory with a reading of 67.75, while the Moving Average Convergence Divergence (MACD) remains firmly bullish. These signals indicate the possibility of short-term consolidation before further gains.
Investors should monitor for price stabilization above the 50-day moving average at $647.40 in the coming days. A sustained hold above this level could pave the way for a rally toward previous resistance points at $806.98 or $944.78. Conversely, a breakdown below the 50-day moving average might trigger a decline toward trendline support near $545.00, though this scenario appears less probable currently.
The author does not hold any direct positions in the mentioned securities, except through passively managed index funds.
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