During the week ended December 15, 2017, Tesla (TSLA) stock continued its bullish trend and ended the week with a solid gain of 9.0%. In contrast, the S&P 500 Index (SPY) (SPX-INDEX) rose 0.9% during the same period.
As of December 18, Tesla stock has emerged as a top gainer for the month among auto stocks (XLY) with an ~10.0% rise so far. During this period, Ford (F) and Fiat Chrysler (FCAU) have risen 1.1% and 6.4%, respectively, while General Motors (GM) has lost 2.2%.
On September 18, TSLA posted its all-time high near $389.61. However, this trend took a downward trend after it announced 3Q17 earnings with its biggest quarterly losses to date. Now, let’s take a look some key factors that could be driving the recent rally in Tesla stock.
Possible factors for optimism
According to a recent Business Insider report, Morgan Stanley auto analyst Adam Jonas believes that TSLA might have already received 1,230 reservations for the Tesla Semi truck. PepsiCo (PEP), Walmart (WMT), and J.B. Hunt are among the large companies that have made multiple reservations for the Tesla Semi so far.
A December 8, 2017, report by CNBC noted that Tesla’s CEO, Elon Musk, confirmed that the company is developing its own AI (artificial intelligence) chip. Musk revealed this information at an event in Long Beach, California. According to the report, Musk opined that Tesla’s new AI hardware could be “the best in the world.”
In 2016, Tesla hired microprocessor engineer Jim Keller, who previously worked with tech giants Advanced Micro Devices (AMD) and Apple (AAPL). At present, Keller is heading TSLA’s Autopilot engineering team.
Tesla’s Autopilot system—which is installed in its Model S, Model X, and Model 3 vehicles—uses the NVIDIA (NVDA) chip. Tesla’s own AI hardware could give the company an edge over the competition.
As of December 18, Tesla stock was trading at $338.87. The stock turned mixed after testing a resistance level near $347.00 during the week ended December 15. This price level could act as an immediate resistance level in the coming sessions.
Tesla’s 14-day RSI (relative strength index) indicator was moving upward from 61.9, reflecting a positive shift in underlying momentum. An immediate support area was near $320.00.
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