Tesla Gets Major Price Target Boost Amid $420 Milestone
There's no technical reason for Tesla's ongoing ascent to slow down anytime soon.
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Milestones occur when a major statistical figure has been achieved. Not just any figure, but one that makes us stand back in admiration.
When a major league pitcher strikes out his 3,000th batter, he joins an exclusive club. The same is true of a batter who manages to hit 500 home runs.
Shares of Tesla TSLA reached a milestone this week, as the stock traded at a split-adjusted $420 for the first time. The number 420 is a reference to marijuana that figures prominently in Tesla lore.
Elon Musk famously tweeted about taking Tesla private at $420 on August 7, 2018. On that day, the stock closed at a split-adjusted price of $25.30.
In hindsight, Musk and his investors probably should’ve taken the company private. Since then, the stock has gained over 1,650%.
Tesla’s "We Robot" event of October 10 (point A) generated little excitement, but it did help investors to see Tesla as less of an automaker, and more of a technology and robotics company. That change in perception was key to the rally that followed.
Shares of Tesla really took off after the automaker’s October 23 earnings report (point B).
Musk’s involvement in President Trump’s successful election campaign also set a positive tone for the stock. Since the November 5 close (point C), Tesla has gained about 67%.
We’ve also seen capitulation by a prominent Tesla bear, Craig Irwin of Roth MKM. Irwin recently raised his price target for Tesla from $85 to $380, an increase of over 440%.
How long will Tesla’s ride last? With the stock trading at an all-time high, and with markets in momentum mode, there is no technical reason for the stock’s ascent to end anytime soon.
Tesla isn’t alone in achieving milestones. Earlier this month, bitcoin reached a major milestone, touching $100,000 for the first time. The feat set off celebrations in the world of crypto, which has been on fire in recent weeks.
In late October, bitcoin’s rising 50-day moving average (blue) crossed above (green arrow) its 200-day moving average (red). This may have been an early sign of momentum for the cryptocurrency.
Like Tesla, bitcoin and other cryptocurrencies have seen massive gains in the wake of the U.S. presidential election.
Why are multiple trading vehicles reaching key milestones? It’s easier to reach your destination when you’re riding a runaway bull. Seasonality favors continued bullish sentiment, so traders might as well make the best of current market conditions while they last.
At the time of publication, Ponsi was long TSLA.
