A Look at TSLA Post-Earnings Reaction

Good Morning Mptraders!  Thursday, January 26, 2023-- Pre-Market Update: Earnings Before the Opening Bell and a look at TSLA post-Earnings Reaction... 

On the subject of Earnings, if TSLA's initial reaction to earnings was subdued-- the stock was up less than 1% twenty minutes after the report was released, it took some very optimistic and bullish guidance on the conference call from none other than Elon Musk (see Seeking Alpha story below) to goose the stock from 144-145 to a new recovery high at 155-156, which happened to be the upper boundary zone of my second target zone derived off of TSLA's four week rounded base pattern shown on my attached Hourly Chart. As we speak, TSLA is trading at 153.90, up about 6.7% from Wednesday's close (144.43), which is above the 50 DMA, now at 152.24, the first time TSLA has traded above that MA in four months. The down-sloping 200 DMA resides at 234.62 (cont below the chart)...

What next for TSLA? Based on my near term pattern work, I can make a compelling argument that TSLA has unfinished business on the upside prior to the completion of the upleg off of the 1/06/23 low at 101.20 that projects next into the 165-170 target zone. 

That said, however, my work also allows for a rest-digestion period into the 147.50 to 143.60 support zone prior to my expectation of upside continuation toward 165-170. Only a decline that slices beneath 141.65/70 will weaken the structure of the post-1/06 upleg. Last is 154.18

(From Seeking Alpha January 25, 2023)

Upbeat commentary from Elon Musk during the company’s Q4 earnings call helped Tesla (NASDAQ:TSLA) shares rebound sharply during Wednesday’s extended session.

During the presentation, Musk offered his perspective on the state of the US economy, his presence on social media, Tesla’s (TSLA) position as an AI company, autonomous driving, and the automaker’s impact on the insurance industry. However, his most impactful statements were likely those that pertained to production and sales outlooks for the full year.

To begin the presentation, Musk immediately downplayed concerns about demand deceleration, noting that price cuts have sparked unprecedented order levels.

“Thus far in January we’ve seen the strongest orders year-to-date than ever in our history,” he said. “We’re currently seeing orders of almost twice the rate of production.”

CFO Zachary Kirkhorn added that price cuts in the US were pursued in light of tax regulations, not demand concerns. Musk later added that the company may have optionality to make “small price increases” during the year based upon robust demand.

On the production front, Musk said that the company’s 1.8M vehicle production target is conservative. According to Musk, internal estimates peg the production rate for 2023 at around 2M vehicles.

“We don’t control if there’s earthquakes, tsunamis, wars, pandemics, etc. If it’s a smooth year, without some big supply chain interruption or massive problem, we have the potential to do 2M cars this year,” he told analysts. “I think there would be demand for that.”

Musk also offered an update on the production of the Cybertruck, forecasting production to begin by the summer. However, he cautioned that “volume production” is not likely to be realized until 2024.

While shares trended toward only a fractional gain shortly before the call, the stock surged to an over 5% gain by the close of remarks. Tesla (TSLA) shares rose 5.34% as of 7:45 PM ET.