Tesla, Inc. (TSLA) shares have risen more than 8% since the beginning of the week after a series of big wins over the past few months. The company turned on the world's largest battery in Southern Australia to power 30,000 homes earlier this month. Meanwhile, Tesla's electric Semi trucks have secured orders from companies like Anheuser-Busch InBev SA/NV (BUD) and Pepsico, Inc. (PEP), and the company has started to build artificial intelligence hardware to reduce its reliance on NVIDIA Corporation (NVDA).
Consumer Edge analysts believe that Tesla could generate $2 billion to $3.5 billion in annual revenue from its trucking business. The firm believes that the electric vehicle maker could capture 5% of what is expected to be a smaller Class 8 truck market over the coming years. With an Overweight rating and a $385.00 price target, the Consumer Edge analysts believe that Tesla stock remains undervalued at its current levels, particularly given its decline in November. (See also: Tesla's Electric Truck Meets Early Success.)
From a technical standpoint, the stock experienced a breakdown following its head and shoulders pattern between August and October. The stock has since recovered and recently broke through several key resistance levels, including the 50- and 200-day moving averages and trendline resistance. The relative strength index (RSI) is nearing overbought conditions at 66.90, but the moving average convergence divergence (MACD) remains in a bullish uptrend.
Traders should watch for an extended breakout from trendline and R2 resistance levels at $351.34 to retest prior highs at around $390.00. With RSI levels approaching 70.0, the more likely scenario is some near-term consolidation between R1 support at $330.10 and upper resistance at $351.41 until the RSI moderates. A breakdown from R1 support could lead to a move to retest prior lows at around $300.00. (For more, see: Reports of 'Hundreds' of Cars at Delivery Centers Calm Tesla Production Fears.)
Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.