Tesla, Inc. (TSLA) shares rose more than 6% during Wednesday's session after second quarter vehicle production reached 87,048 and deliveries hit 95,200. The company cited "significant progress" in streamlining its global logistics and delivery operations at higher volumes, which enables cost efficiencies and improvements to working capital. With more orders than deliveries, the third quarter backlog increased, in a sign of health moving forward.
Analysts praised the strong delivery figures but remain mixed on the stock given its valuation. For instance, Wedbush analyst Daniel Ives notes that the numbers beat Street estimates across the board but reiterated his Neutral rating and $230 price target. Morgan Stanley's Adam Jonas held a similar view, saying that he doesn't expect bears to capitulate as Tesla stock squeezes a bit higher over the coming sessions.
Despite the strong second quarter deliveries, the company did not update its full-year forecast of 360,000 to 400,000 deliveries or provide any insight into Elon Musk's suggestion that the company could be profitable during the second half of the year. The federal electric vehicle tax credit also decreased beginning on July 1 of this year.
From a technical standpoint, Tesla stock rebounded from its lows in late May and early June above the 50-day moving average. The relative strength index (RSI) moved closer to overbought levels with a reading of 65.21, but the moving average convergence divergence (MACD) remains in a bullish uptrend. These indicators suggest that the stock could see more upside over the coming sessions before experiencing consolidation.
Traders should watch for a move toward reaction highs of around $260 over the coming sessions and/or some consolidation between that level and trendline support at around $230. If the stock breaks out from $260, traders could see a move toward reaction highs near the 200-day moving average at $285. If the stock breaks down, traders should watch for support near the 50-day moving average at $220.
The author holds no position in the stock(s) mentioned except through passively managed index funds.