Overview
Mark Newton, Head of Technical Research at Fundstrat, shares his updated outlook on Tesla stock, emphasizing a medium to long-term bullish view despite recent volatility. He discusses technical patterns, key price targets, sentiment, and broader market context, projecting a strong end to the year for Tesla.
Recent Tesla Stock Performance and Technical Analysis
- Tesla experienced a severe correction into April, bottoming near $214 before rallying over 70% by early summer.
- Since the rally, Tesla has traded sideways in a technical triangle pattern, usually resolved by a breakout to the upside.
- Recent sessions have been encouraging, with Tesla approaching the top of its trading range.
- A move above $338 (triangle's upper edge) on strong volume is needed to confirm breakout.
- Breakout targets are $367, $423–$426 initially, with an ultimate year-end target at the all-time high of $488.
Outlook and Forecast
- Mark maintains his previous forecast: Tesla is likely to be positive in the second half of the year and could hit $488 by year-end.
- The strongest rally segment is anticipated from October through December 2024.
- Medium to long-term bullishness remains, with a possible cyclical pullback in early 2026 but longer-term constructive patterns.
Key Technical and Market Factors
- Momentum indicators (e.g., MACD, personal cycles) are turning positive for Tesla.
- The $298 level is important near-term support; a drop below April's lows (~$214) is seen as highly unlikely.
- Institutional sentiment has turned more positive, even as media coverage remains largely negative.
- A confirmed breakout on volume could attract more investors, improving stock momentum.
Sentiment and Fundamentals
- Despite negative media coverage, Tesla seems to have established a price floor during recent consolidation.
- The stock's rangebound behavior reflects awaiting confirmation of fundamental business results, especially from new initiatives like robo-taxis and AI.
- Institutional analysts recognize Tesla as an AI-related company, but broader market sentiment is yet to fully reflect this.
Tesla and the “Granny Shots” ETF
- Tesla remains part of Fundstrat’s GRNY ETF, though not among the top 10 holdings due to recent relative underperformance.
- The ETF focuses on large-cap growth themes and has had significant growth and strong performance.
Broader Market and AI Commentary
- AI and technology sectors remain strong market drivers, contributing to optimism for the overall market and the Mag 7 stocks.
- Both Mark Newton and Tom Lee remain positive on the S&P 500, expecting continued gains into year-end.
- Potential minor market pullbacks are expected in late August or September, presenting buying opportunities.
Decisions
- Maintain year-end Tesla price target at $488.
- Continue medium to long-term bullish stance on Tesla and technology sector.
Action Items
- TBD – Mark Newton: Monitor for breakout above $338 and confirm with volume before adjusting position.
- TBD – Interested investors: Follow Mark Newton’s and Tom Lee's market insights via Funstrat and FS Insight platforms.
Questions / Follow-Ups
- Monitor whether Tesla's breakout above $338 occurs and if the stock achieves targets by year-end.
- Observe if institutional and retail sentiment shifts as Tesla's fundamentals (AI, robo-taxi) begin to impact earnings.