U.S. Markets closed

Is Tesla's 40% Run Just The Beginning?

Jayson Derrick

Shares of Tesla Inc (NASDAQ: TSLA) are up more than 40% since October, and investors shouldn't fight the trend, Ari Wald, Oppenheimer's head of technical analysis, said on CNBC's "Trading Nation."

'Supportive' Conditions

Tesla could benefit from the broader strength in the stock market, which is trading similarly to how it did in late 2016, Wald said. The current strength in Tesla's stock hasn't been seen since stocks ripped higher in late 2016 and throughout 2017, he said. 

"The key positive for Tesla here is that macro conditions are supportive here." 

Tesla's four-year chart does show some periods of "very erratic behavior up and down," Wald said.

The analyst said he "wouldn't beg against" Tesla's stock at current levels, although after the strong "rip" in the past few weeks, Tesla's stock is "not one we'd be highlighting as a tactical idea either."

'Seen This Story Before'

Tesla's recent stock momentum should be put in perspective, as "we've seen this story before," John Petrides, portfolio manager at Tocqueville Asset Management, said during the "Trading Nation" segment.

Tesla showed momentum last year with two consecutive quarters of cash flow growth, the portfolio manager said. 

After two strong quarters, Tesla's management "blew up the next quarter," which prompted a dramatic sell-off, he said.

Tesla may want to consider an equity offering at the current valuation, which is "way too expensive for my blood," Petrides said. The company could see long-term benefits by preparing for growth with a "cheap" form of capital, he said. 

"But that's just my opinion and I would stay away from the shares at current value." 

Tesla shares were trading 0.92% higher at $348.26 at the time of publication. 

Related Links:

Musk Vs. Einhorn: Tesla CEO Offers Hedge Fund Manager A Pair Of Short Shorts

Jefferies Raises Tesla Price Target To 0: 'A Better Foundation'

Photo courtesy of Tesla. 

Latest Ratings for TSLA

Date Firm Action From To
Nov 2019 Maintains Buy
Oct 2019 Maintains Equal-Weight
Oct 2019 Downgrades Neutral Sell

View More Analyst Ratings for TSLA
View the Latest Analyst Ratings


See more from Benzinga

© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.