On the weekly chart, the TSLA /F ratio is plotted versus time. An ascending ratio suggests, TSLA
market cap is dominating FORD while a falling ratio is the opposite. If a trader is trading both
of them this charge helps guide relative momentum and so also trading decisions related to
the shift in the EV trend and other related long-view concepts. FORD just did a big earnings
beat. While TSLA is sideways at best, FORD popped 8-10% which will reflect itself in the overall
weekly candle being red and somewhat engulfing. I am hopeful those trading both Ford and
Tesla find this helpful. Zooming into daily or 2-5H time frames may reveal more dynamic
price ratio action.
market cap is dominating FORD while a falling ratio is the opposite. If a trader is trading both
of them this charge helps guide relative momentum and so also trading decisions related to
the shift in the EV trend and other related long-view concepts. FORD just did a big earnings
beat. While TSLA is sideways at best, FORD popped 8-10% which will reflect itself in the overall
weekly candle being red and somewhat engulfing. I am hopeful those trading both Ford and
Tesla find this helpful. Zooming into daily or 2-5H time frames may reveal more dynamic
price ratio action.
Trade active:
Long on F and short on TSLA with big positioning in the latter. Ford on the 15-minute
time frame completed a round bottom reversal on the earnings leadup and then put
in a high tight flag pattern on the earnings. If the pattern holds, a period of rest and then a bullish continuation.
time frame completed a round bottom reversal on the earnings leadup and then put
in a high tight flag pattern on the earnings. If the pattern holds, a period of rest and then a bullish continuation.
Trade active:
Ford on a short time frame chart linked here appears ready for bullish continuation.
Buckle up the ride could be fast like Lightning.
Buckle up the ride could be fast like Lightning.
Trade active:
TSLA might be rising a little but F is rising a lot. the falling ratio speaks miles......
Trade active:
TSLA is still dead cat bouncing. F has volume suppression in theft from surging tech earnings and crypto stocks stealing attention. All is good.
Trade active:
TSLA still climbing and clawing. The underlying dark pool associated with the corporate move to Austin and Deo's compensation package rebuild is considered. Ford same old same old.
Comment:
Barron's · 2024/02/13 22:30 GMT-07:00
Al Root
Tesla stock has been having a terrible start to the new year. Figuring out what has been driving shares can be difficult for investors. Figuring out why the shares have declined so much is a relatively easy task.
The answer lies in the wisdom of crowds. Look at Wall Street earnings estimates. They are the numerical reflection of all the news impacting any company -- Tesla included.
Coming into Wednesday, Tesla stock has fallen 26% this year while the S&P 500 and Nasdaq Composite have both risen about 4%. It's the worst start for Tesla shares since 2016 when they dropped almost 40% over a similar span to start that year.
The drop this year is steep, but the size of it makes a lot of sense. The current consensus call for Tesla's 2024 earnings per share is about $3.08, according to FactSet. The estimate started the year at about $3.84. Estimates have come down about 20%. The fall closely mirrors what Tesla stock has done within a few percentage points.
Looking back to October -- just before Tesla stock dropped 9.3% after the electric-vehicle company reported third-quarter earnings -- Wall Street's earnings estimate for 2024 was roughly $4.50 a share. The estimate is down about 30% since then. Tesla stock has fallen about 24% over the same span.
Analysts don't change just one estimate at a time. Wall Street's 2025 earnings estimates are down as well, roughly 20% lower since the start of the year. Taking a longer view, 2025 estimates peaked north of $8 a share in December 2022. They are down 50% since then to $4.23 a share. Tesla stock has fallen 55% from its all-time closing high of just under $410 a share reached in November 2021.
Estimate revisions are a useful tool for investors to check if stock moves make sense. When they line up -- as they have with Tesla lately -- it's a sign that investors are worried about company fundamentals. When revisions and the stock moves don't line up, it's a signal that something else is on investors' minds.
Remember Twitter? Tesla CEO Elon Musk tweeted that he had made a bid for Twitter in April 2022. From that tweet, through the end of that year, Tesla stock dropped some 60%. Wall Street's estimates for 2023 earnings -- stocks always trade on future earnings -- rose from about $4.68 to $5.59 a share over the same span.
The divergence shows that Musk's Twitter distraction bothered Tesla investors. After those fears faded, Tesla stock doubled in 2023 despite vehicle price cuts and rising interest rates.
To be sure, estimate revisions can't do everything for investors. They can't tell them exactly what is going on at a company. There are many reasons Tesla's earnings estimates have been coming down. For starters, there are those price cuts that have hurt profit margins. And those higher interest rates have made all cars more expensive for buyers. There also is more EV competition around the globe and Tesla doesn't look like it will have a lower-priced model that can help expand its addressable market until 2025.
Those are some of the headwinds the company faces. Those headwinds have been evaluated by more than 40 analysts, resulting in lower earnings estimates. Investors have reacted to those reduced estimates by sending Tesla stock lower.
On a very basic level, that's how the stock market is supposed to work.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 14, 2024 05:30 ET (10:30 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Al Root
Tesla stock has been having a terrible start to the new year. Figuring out what has been driving shares can be difficult for investors. Figuring out why the shares have declined so much is a relatively easy task.
The answer lies in the wisdom of crowds. Look at Wall Street earnings estimates. They are the numerical reflection of all the news impacting any company -- Tesla included.
Coming into Wednesday, Tesla stock has fallen 26% this year while the S&P 500 and Nasdaq Composite have both risen about 4%. It's the worst start for Tesla shares since 2016 when they dropped almost 40% over a similar span to start that year.
The drop this year is steep, but the size of it makes a lot of sense. The current consensus call for Tesla's 2024 earnings per share is about $3.08, according to FactSet. The estimate started the year at about $3.84. Estimates have come down about 20%. The fall closely mirrors what Tesla stock has done within a few percentage points.
Looking back to October -- just before Tesla stock dropped 9.3% after the electric-vehicle company reported third-quarter earnings -- Wall Street's earnings estimate for 2024 was roughly $4.50 a share. The estimate is down about 30% since then. Tesla stock has fallen about 24% over the same span.
Analysts don't change just one estimate at a time. Wall Street's 2025 earnings estimates are down as well, roughly 20% lower since the start of the year. Taking a longer view, 2025 estimates peaked north of $8 a share in December 2022. They are down 50% since then to $4.23 a share. Tesla stock has fallen 55% from its all-time closing high of just under $410 a share reached in November 2021.
Estimate revisions are a useful tool for investors to check if stock moves make sense. When they line up -- as they have with Tesla lately -- it's a sign that investors are worried about company fundamentals. When revisions and the stock moves don't line up, it's a signal that something else is on investors' minds.
Remember Twitter? Tesla CEO Elon Musk tweeted that he had made a bid for Twitter in April 2022. From that tweet, through the end of that year, Tesla stock dropped some 60%. Wall Street's estimates for 2023 earnings -- stocks always trade on future earnings -- rose from about $4.68 to $5.59 a share over the same span.
The divergence shows that Musk's Twitter distraction bothered Tesla investors. After those fears faded, Tesla stock doubled in 2023 despite vehicle price cuts and rising interest rates.
To be sure, estimate revisions can't do everything for investors. They can't tell them exactly what is going on at a company. There are many reasons Tesla's earnings estimates have been coming down. For starters, there are those price cuts that have hurt profit margins. And those higher interest rates have made all cars more expensive for buyers. There also is more EV competition around the globe and Tesla doesn't look like it will have a lower-priced model that can help expand its addressable market until 2025.
Those are some of the headwinds the company faces. Those headwinds have been evaluated by more than 40 analysts, resulting in lower earnings estimates. Investors have reacted to those reduced estimates by sending Tesla stock lower.
On a very basic level, that's how the stock market is supposed to work.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 14, 2024 05:30 ET (10:30 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
TSDD is an ETF inverse to TSLA and 2x leverage to take a look at if you are shorting TSLA.