Tesla Inc. (NASDAQ:TSLA) is poised for significant stock market activity as investors prepare for three critical events over the next six weeks. These events include second-quarter delivery results, earnings in late July, and the unveiling of Tesla’s self-driving vehicle, the robotaxi, in early August. According to Citigroup Inc. data, options trading indicates that investors are positioning for a potential 15% move in either direction through mid-August.
Upcoming Catalysts Expected to Drive Volatility
Citi’s equity trading strategist, Vishal Vivek, noted that Tesla options might be underestimating the potential volatility. “Tesla options are underestimating volatility across these three upcoming catalysts,” Vivek explained. Historically, similar events have triggered significant stock moves, not only for Tesla but also for its suppliers and other electric vehicle makers.
The second-quarter delivery results, in particular, are highly anticipated. Mark Newton, global head of technical strategy at Fundstrat Global Advisors, highlighted the stock’s recent performance: “While the intermediate-term period of consolidation and downtrend remains intact for Tesla since 2021, the short-term picture has begun to improve markedly in the last two months.”
Analyst Expectations and Market Reactions
Analysts have been revising their estimates for Tesla’s second-quarter deliveries downward, which has affected expectations for profit and revenue. However, some believe that Tesla’s challenges in selling its vehicles are already well understood by the market. As a result, barring a significant miss, the stock could rally once the delivery figures are released.
Options traders have shown increasing bullishness, with a noticeable interest in calls that anticipate a 10% rally, set to expire in two months. This trend suggests rising confidence in Tesla’s stock performance, coupled with a decreasing desire to hedge against a downturn.
The Robotaxi Reveal and Its Implications
The unveiling of Tesla’s robotaxi in August is expected to be a pivotal event. CEO Elon Musk has been working to reposition Tesla as an artificial intelligence company, rather than just an EV maker. The success of this strategy hinges significantly on the robotaxi launch. Tesla’s current high valuation is largely supported by investor confidence in Musk’s ability to transform the company into a leader in AI.
Key Technical Levels to Watch
Technical strategists emphasize the importance of certain price levels. Ari Wald, head of technical analysis at Oppenheimer & Co., noted, “On the upside, a rally above the $206 resistance, which is a convergence of its February peak and the 200-day moving average, would mark a breakout and act as the next incremental positive for the stock’s trend.” This would represent a 4.3% increase from Tesla’s Thursday close of $197.42.
Conversely, a decline below the 50-day moving average would be significant, requiring an 11% drop from the stock’s last close.
Conclusion: Potential for Significant Stock Movement
Adam Sarhan, founder and CEO at 50 Park Investments, summarized the market sentiment: “While it is hard to predict what the next few weeks have in store for Tesla, what I can say with more certainty is that these events are likely to end the recent period of relative calm in the stock price. Positive surprises could fuel a rally, while disappointments might lead to a selloff.”
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