Can tesla keep driving higher?

Tesla's share price jumped 5.6% on Friday and is set t open an additional 4.5% higher on the open today.

 

What's lifting Tesla?

1. Strong deliveries

Tesla reported that it delivered more vehicles in Q1 than expected, despite the coronavirus setbacks. Tesla delivered 88,400 cars in Q1 2020, beating Wall Street's expectations of 79,908a units. Whilst Q1 saw a jump from Q1 2019 when jut 63,000 cars were delivered, the number was short of Q4 2019 when 112,00 when cars were delivered.

Investors have good reason to cheer these numbers given the upheaval that the firm has faced during the first three months on the year. Factories in China closed down for several weeks in January and February and its California plant and New York plants shut last week. Despite that disruption Tesla produced 102,672 cars in Q1, just 200 fewer that Q4 2019.

2. Coronavirus optimism

Today the mood music in the market is more upbeat after some signs over the weekend that the spread of coronavirus could be slowing, and containment measures might be working. Italy and Spain have both seen covid-19 cases fatalities fall. Germany and France are also seeing a flattening of the curve and the US has seen rates slow over the weekend, although its unclear how sustained that trend will be.

Tesla has in no way been immune to the current coronavirus market rout. The car industry as a whole has been hit hard by the lock downs across the globe and the tough economic conditions which are set to follow are likely to put consumers off high-value purchases. However, Tesla has proven to be more resilient than other car makers. That said, we will most likely need to see US coronavirus numbers persistently easing before we see any sustained move higher.

3. More EV's?

After the extended period in lock down owing to a natural disaster, there is a good chance that consumers will come out the other side with changed habits and visions. A more environmentally friendly approach could be one such adjustment. This would be favourable for Electric Vehicles such as Tesla.

 

Levels to watch

Tesla traded 5.6% higher on Friday and is set to extend gains by 4.6% on the open today, attempting to recoup 6.6% losses from across the previous week. The stock trades above its 200 sma on the daily chart. It looks set to test its 100sma, a move above here could see more bulls jump in.

Immediate resistance can be seen at 515.50 (yesterday's high) prior to 528.50 (100 sma) and 560 (high 26th March)

On the flipside, support can be seen at 446 (low 2nd April) prior to 387 (200 sma) and 350.50 (low 17th March).