Tesla Motors (TSLA) shares rallied over 10% to $233.95 after reporting a delivery record of 11,603 new vehicles in the third quarter. The company also anticipates 17,000-19,000 shipments this quarter. Third quarter demand for Tesla's Model S increased 50% over a year ago. Production also impressed by making 13,091 vehicle despite being shut down for a week. Investors chose to overlook both the -$0.58 earnings per share miss (-$0.50 expected) and the lowering of 2015 full year guidance with deliveries to 50,000-52,000, from a prior range of 50,000-55,000.
Price action on the Tesla Motors daily chart highlights the key respect of the psychological $200 handle. The recent bearish slide appears finally over after price broke above the downward sloping trendline that started with the September 25th high of $267. If the bullish stance continues, price could target the 200-day SMA which currently trades at the $233.32 level. Further upside target could target $245-$255 range. A longer-term target includes the $282.00 resistance level.
If this rally stalls, we see could range bound price action with key support at the $208 support level. Consecutive daily closes below this key level could open the door for a major selloff that could target the 2015 low of $181.40.
The Trade: Buy Tesla at $227.50, with a stop loss at $217.50 and a take profit at $247.50. The Risk/Reward Ratio is 1:2