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Tesla Motors is Exciting... But Its Stock is Stagnant

The internet and tech fans worldwide are buzzing about Tesla Motors' newest product announcement. Will the news send Tesla's stock (TSLA) higher?

The upcoming "reveal" will probably be linked to Tesla's Model 3 car and its internal design, plus some much-anticipated autopilot advancements.

Elon Musk dropped some hints on Twitter today about the nature of tonight's Tesla media event, scheduled for 5pm PST.
Elon Musk Tesla Model 3 event tweets
There is no doubt that Tesla Motors is an incredibly innovative and exciting company, and the Model 3 in question is a major product.

When the Model 3 is released to buyers in late 2017 and 2018, it will mark the full realization of Tesla's mission: to build and deliver an affordable electric car that will help kickstart mass adoption of electric vehicles (EVs). 

 
Tesla Model 3 roadside profile shot car
Tesla Model 3 via Tesla.com


So will this latest product event help Tesla (TSLA) get its stock back in gear? 

After a huge run up in 2013 and 2014, Tesla's stock peaked above $290 and has drifted lower since. The chart below shows TSLA meandering through a rather wide 2-year trading range. TSLA has drifted between $180 (an area of price support) and $280 (price ceiling or resistance) for most of 2014-2016.  


Tesla Motors (TSLA) stock chart trading range
Tesla Motors (TSLA) stock has been fluctuating in a wide 2-year trading range.


Pretty boring right? Well, safe is usually boring, and that's what we have here. 

Once Tesla made good on its early promises, the doubtful traders, fund managers, and industry watchers all climbed aboard. Only they, or many of them, missed out on the powerful advance that occurred in 2013, when TSLA was confounding its doubters and breaking out to new all-time highs. 

Tesla (TSLA) stock chart: 2013 breakout
Rewind to 2013: Tesla's (TSLA) initial breakout and move to new highs.


Now that is the start of a powerful move (and note to self: get aboard next time you see it taking shape in a new growth leader). 

Sidenote: When you see TSLA or any new growth stock breaking out to new highs, especially on strong volume (note the ramp up in green volume bars confirming strong buyer demand), that is a huge signal that something big is taking shape in the market. 

Take a small position ("don't risk thy whole wad"), set a stop loss order to manage your risk, and see what happens. Believe me, it's better than standing on the sidelines shaking your head in a mixture of awe and regret. Back to the launch, and to the current outlook for Tesla's stock. 

Tonight's product event may help TSLA climb a bit tomorrow, but it would have to be one heck of a humdinger to bring about a powerful, sustained advance in the stock price. 

In order for TSLA to break out of its long trading range, the stock would first need to reclaim the $250 level it last touched in April 2016. It would then need to climb back to the $285-$290 level and break out above that price ceiling to make a new all-time high.  

Tesla Motors (TSLA) stock price: $30 billion market cap TSLA
TSLA current $30 billion market cap, via Yahoo Finance


With a market cap of $30 billion, Tesla (TSLA) is now more of a mature, large-cap growth stock than the young tyro rocketing out of its post-IPO base. 

But don't count Elon Musk & Co. out yet on future stock price appreciation. 

While it may take quite a while for TSLA to regain strong momentum to the upside, especially as R&D spending and recent shareholder dilutions sink profits, the innovations that Tesla will spur in clean energy and EVs are bound to bring more excitement from investors and consumers. That excitement will lead to added demand, for Tesla products and its shares. 

Besides, do you really want to bet against a CEO whose companies can build desirable electric cars (Tesla), land reusable rockets on sea platforms (SpaceX), and redesign your rooftop with new integrated solar panels (SolarCity)? 

Elon Musk offers an exciting vision for Tesla Motors (TSLA), which includes his plans to merge with SolarCity, create a seamless clean energy solution for its customers, and eventually overtake Apple (AAPL) to become the first trillion dollar company. 

If he can get the company 1/10th of the way there, to a $100 billion market cap, it will provide a major long-term boost for Tesla's currently flagging share price. 

Related posts:

1. Tesla Shares Slide to 18-month low: TSLA Chart Review.

2. Tesla Hits New All-Time High: Do Androids Dream of Electric Cars?

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