Tesla Soared

Tesla Soared - 3 Reasons to Buy

Tesla (TSLA) stock experienced a significant surge, rising 5.3% to close at $187.44, outpacing the Nasdaq Composite (COMP) which increased by 0.95%. Meanwhile, the S&P 500 (SPX) and Nasdaq ended the day up 0.77% and 1%, respectively. While no major analyst upgrades or CEO announcements explain this jump, several underlying factors suggest why now might be a good time to consider buying Tesla stock.

1. Approval of Musk’s Pay Package

The recent shareholder approval of Elon Musk’s 2018 pay package, which grants him around 300 million incentive-laden stock options, is a significant milestone. This approval was necessary after a Delaware judge voided the original deal due to inadequate investor disclosures. The re-approved package garnered about 72% support, slightly down from the 73% approval in 2018.

Wedbush analyst Dan Ives highlighted that resolving this pay package issue has removed a $20 to $25 overhang on Tesla stock. If the judge’s decision is ultimately rescinded, it could push Tesla’s stock price to around $200.

2. Technical Resistance and Potential Breakthroughs

Technical stock-market analysts point to resistance levels around $200 for Tesla. According to Frank Cappelleri, founder of CappThesis, the $198 to $200 range represents a significant resistance level from April 29, with further key levels at $205 (late February high) and $209 (200-day moving average).

Breaking through these resistance levels could signal a bullish trend for Tesla, suggesting that the stock might see further gains. Investors often look for such technical breakthroughs as indicators of positive momentum.

3. Upcoming Milestones and Innovations

Tesla has several key events on the horizon that could positively impact its stock price. The second-quarter delivery report, due in early July, is expected to be a critical indicator. Wall Street anticipates 450,000 deliveries, down from 466,000 a year ago. Despite the expected decline, a strong performance could help the stock break through the $200 resistance.

Moreover, Tesla’s upcoming robotaxi unveiling on August 8 is another exciting development. The event will showcase a new vehicle and updates on Tesla's AI-driven autonomous driving software. Any significant advancements or surprises during this event could provide additional reasons for investors to be optimistic about Tesla’s future.

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