Fox Business says it is official: Elon Musk has just become the world’s 4th richest man after the historic spike in Tesla stocks yesterday added $8billion to his net worth. Tesla share price ís fast pushing towards the $1900 price level, following the surge of the last two days that has taken it into record territory.
So why is Tesla share price soaring even without significant headlines? Tesla’s stock has nearly quadrupled this year and has added 32% in August. It has also added 75% gains this quarter amid the emergence of new competition from companies like Canoo.
The main drivers of the Tesla share price are:
a) The belief that fund managers will start to buy into the stock once it lists in the S&P 500. Tesla has already met the financial conditions required for this listing.
b) The recent 5 for 1 stock split, which will collapse prices to around $350 per share. At a cheaper rate, there is a belief that this is a more pocket-friendly price for retail investors, and this could enable them to snap up Tesla shares, ultimately driving prices higher. How long ago was Tesla share price at $350? As recently as March!
c) The company’s earnings, sales and performance across the world (especially in China) have been stellar. Tesla dominates the EV market.
d) Elon Musk now has a reputation as a modern-day Midas. Everything he has touched has turned to gold: PayPal, Tesla, SpaceX…all success stories.
Investors do not care about Tesla ambiguous valuations. They simply want in.
Technical Outlook for Nasdaq 100
The surge of Friday broke through the previous resistance at 1794.99. Yesterday’s candle confirmed that breakout by its higher close, which signalled an 11% gain on the Tesla share price. The stock opened lower today but has quickly closed that gap and maintains the bullish bias.
Yesterday’s highs now form the new resistance to beat. A break above this allows Tesla share price to surpass the 1900 mark, just before the August 28 stock split occurs.
On the flip side, we could see a pullback towards 1794.99 (former record high), or even further towards 1678.8. Supporting this outlook is the fact that the cut-off date to be in Tesla’s books for the stock split is August 21. After that date, we could see some decline in interest as investors decide to wait for the stock split before they get back in.
Tesla Share Price Chart (daily)