Breakdown of the latest developments on the global exchanges
Jul 27, 2021, 8:18 AM GMT

Tesla Beats All Expectations, the Share Price Set to Rally

Tesla's Q2 earnings shatter all expectations, delivering better-than-expected revenue and income data. The share price poised to climb

Tesla is one of the big technology companies that are listed in the Nasdaq Composite. The index looks poised to climb higher on the robust quarterly performance of the sector. Read more about the current outlook on the Nasdaq from our most recent analysis.

Tesla's quarterly earnings report beats all expectations in the three months leading up to June, reporting massive revenue gains. The car manufacturer reported a tenfold increase in income from the same period last year. Its share price looks set to rally on the robust performance.

The share price of Tesla is advancing in an uptrend as the price prepares to break out above the 38.2% Fibonacci retracement level

The quarterly performance could catalyse a new substantial breakout following the recent consolidation of the price action. As shown on the 4H chart above, the share price has been contained within the 23.6 per cent Fibonacci retracement level at 622.85 and the 38.2 per cent Fibonacci at 675.75 for quite a while.

The former represents a major resistance-turned-support, while the latter has been tested on two separate occasions since early July. This behaviour is indicative of a likely preparation of the share price for an eventual breakout above 675.75 decisively.

One possible explanation as to why the price has not been able to do so already has to do with the fact that the 38.2 per cent Fibonacci is positioned just below the psychologically significant resistance level at 700.00. This major threshold is currently being underpinned by the 150-day MA (in orange).

At present, the share price is strengthening above the lower boundary of the channel, the 200-day MA (in purple) and the 100-day MA (in blue). All of these factors represent very solid bullish signals.

The next target for the renewed bullish upswing is underscored by the 61.8 per cent Fibonacci level at 761.26, currently converging with the upper boundary of the channel.

Tesla Breaks the $1 Billion Mark for the First Time Ever

The electric vehicle manufacturer delivered earnings per share (EPS) of $1.45 vs $0.98 expected. Revenue grew to $11.96 billion while the consensus forecasts were anticipating the revenue to be reported at $11.30 billion.

Tesla's EPS jump in Q2. The company's net income rises past $1 billion for the first time ever

Meanwhile, net income for Q2 exceeded $1 billion for the first time ever, shattering all expectations. Despite having to deal with some supply bottlenecks, which were observed by Jerome Powell and the FED in June, Tesla was able to boost its net deliveries.

"In the second quarter of 2021, we broke new and notable records. We produced and delivered over 200,000 vehicles, achieved an operating margin of 11.0% and exceeded $1B of GAAP net income for the first time in our history."