Tesla Stock Price and Forecast: TSLA bulls back in charge as Powell pushes equities

TSLA stock surges higher on Wednesday as risk assets rally.
US CPI highest since 1982, but market expecting this.
Tesla shares surge over 4% to close at $1,106.

Ivan Brian FXStreet

Tesla (TSLA) and risk assets rallied on Wednesday as the inflation-busting Federal Reserve is on track to raise rates in March. CME fed funds futures expect a 90% chance of a hike now, and this had initially dented investor appetite for risker assets. Tesla fits into this category with its high valuation, but when risk appetites return it tends to outperform. This was the case on Wednesday with a 4% gain for the stock.

Tesla Stock News

The macroeconomic backdrop has once again shifted to favor risk assets, and TSLA shares benefitted. It is not so much the macro environment changing but rather investor perception of it. Investors are growing more comfortable with the thought of higher inflation for longer. The microenvironment also received a boost this week with Tesla hitting a new record for production at its Shanghai plant, according to the latest Chinese data. Volkswagen added to the bullish news for EV makers as it said EV sales were up 97% last year for the German car conglomerate.

Tesla will release its Q4 and full-year earnings on January 26, so we do not have too long to see how these delivery numbers flow through to the bottom line. The last set of earnings showed margins increasing despite rising input costs and supply chain issues. If this trend continues then Tesla should be expected to post another strong set of earnings and beat the street.

Tesla Stock Forecast

The stock is still in a downtrend formation with a series of lower highs, but now it looks like we may have set a higher low. This could indicate a reversal. The low then at $980 from Monday is our key short-term pivot. Above and we stay bullish in the short term with a target of $1,200 and then record highs at $1,243. Break $980, and the next obvious move will be to test $886 and then $843.

Tesla chart, daily

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Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

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