Tesla Shares on Track to Turn Positive for 2024 After $200 Billion Rally

Tesla Inc. shares are set to extend gains for an eighth consecutive session on Friday, putting the stock of the world’s most valuable automaker on track to turn positive for the year.

Shares of the electric-vehicle maker rose as much as 3% in premarket trading, with its latest rally adding more than $200 billion in market capitalization. Earlier this week, the rally was boosted further after the company reported deliveries for the second quarter that beat the average analyst estimate.

While analysts were positive about those stronger-than-expected deliveries, they marked the auto maker’s first consecutive quarterly decline for deliveries for more than a decade. The car maker on Tuesday said it delivered 443,956 vehicles in the second quarter, exceeding the average of 439,302 that analysts on Wall Street had estimated, but falling compared with prior quarters.

“The worst is in the rear-view mirror for Tesla,” Wedbush Securities Inc. analyst Daniel Ives wrote in a Friday note. “Very importantly, it appears China saw a ‘mini rebound’ in the June quarter.” 

A Chinese government statement said a number of state-owned companies in Shanghai have bought Tesla’s Model Y for business use. However, heightened competition in the country has kindled price wars and demand worries for the EV maker this year.

Tesla has had a tough year as Chief Executive Officer Elon Musk announced major staff reductions in April, followed by additional cuts of as much as 20%. 

Tesla shares, which had been trading within a pretty tight range since early May, have finally broken out. The stock has blown past its 200-day moving average — a longer-term trend indicator that traders pay close attention to. 

To be sure, there is at least one technical measure suggesting a pullback might be around the corner. The rally has propelled the stock’s relative strength index, a gauge of bullish and bearish price momentum ranging from zero to 100, above 80 in recent days.

Such an elevated RSI level is generally viewed as a signal that a decline is imminent, as buying has gotten excessive.

This article was generated from an automated news agency feed without modifications to text.