The electric car industry needs to prove itself; the jury is out. Electric vehicles are only glorified golf carts, however, the battery packs are unique.
At the same time, Tesla is also involved with driverless vehicle technology. The autonomous car industry is a joke. The media hypes the technology daily for the last few years. If you have to run down to the store quickly for bread and milk, that your spouse or significant other needs immediately, do you want to jump in your car and be back in 20 minutes, or, do you want to sit in a driverless vehicle for 45 minutes as it slowly ushers you back and forth to the store? Duh.
What the public, even analysts do not realize, is that for any engineering project or new technology, it takes 20% of the budget to complete 80% of the job but it takes the other 80% of the dough to complete the last 20%. Autonomous vehicles are at the point where the first 80% of the job is done. Engineers and technicians pat each other on the back telling one another how smart they all are. But think about the billions upon billions of dollars spent to take autonomous vehicles this far. Four times that amount of money will be needed going forward to polish the technology for public consumption. It will take years and likely a couple decades to reach that goal far longer than anyone realizes. Among Keystone's many accomplishments, he is also a licensed professional engineer in Pennsylvania and graduated at the top of his class in chemical engineering decades ago.
This is why you see autonomous car videotape always filmed on sunny days. The technology has a formidable task dealing with dark conditions, storms, hail, snow, slush. In Pennsylvania's winters, many of the car sensors will likely be covered in slush and inoperable. When the industry finally began testing vehicles at night, an autonomous car ran over a lady killing her. Autonomous vehicles will have many excellent uses such as in open-pit mining or perhaps moving goods via trucks on interstates. However, a driverless car for Ma and Pa is still likely a decade or two away and that is if anyone would even want one. In addition, once the recession hits, you will see budgets slashed all over the place and the autonomous car budgets will be at the top of the list adding more years of time before the driverless cars are ever available to the public.
The major automobile manufacturers are bringing their electric cars to market which will create competition for Tesla. Consumers may feel better about buying an electric vehicle from a solid large carmaker that offers full service rather than shaky Tesla. China is taking away subsidies offered to Tesla. That is a new headache that may require Musk to smoke more doobies and drink more shots. All the environmental-style technologies, electric cars, solar energy, wind energy, etc.., do not economically survive without government subsidies. Germany had a thriving solar industry years ago. Once the government stopped subsidizing it, the industry was toast.
All that windbag stuff above aside, what is TSLA stock price going to do? That is all anyone cares about. Note how it printed an ascending triangle pattern the first 2-1/2 years of its life. The base at 16.8 and breakout line is 36.6 which targets 56.4 that is easily achieved. Price stutter-steps there and then rocket launches. The Federal Reserve had the money-printing operation in full gear in 2013 and 2014. Former Fed Chairs Bernanke and Yellen promised QE Infinity. Other global central bankers started printing money colluding with the Fed which continues to the present day. All stocks jump into the stratosphere as price discovery is destroyed by easy money.
TSLA spends 2014 through 2017 bouncing sideways through the 180-280 channel. Then another thrust higher occurs to begin 2017 and then price bounces sideways through the 280-380 range the last two years. The choppiness in price is due to the news soundbites. One day Tesla is running out of cash, the next day the production numbers are exceeding expectations. Up and down. Tesla sure does have a lot of drama around it. Keystone played it maybe two or three years ago for a couple trades but other than that has stayed away. It is a very emotional stock reflecting its CEO's personality. Keystone does not like drama.
The negative divergence is glaring. Tesla is about to have a religious experience in 2019. Keystone is assembling his 2019 predictions so perhaps a -30% to -50% crash in Tesla stock will be on tap next year.
The neggie d wants to smackdown price in this monthly time frame. Price lightly tapped the upper standard deviation line at 379 this month so the middle band at 322 is on the table. Price stabbed down through this band and recovered back above. The lower band at 266 is on the table going forward. Note the tight standard deviation bands the tightest in Tesla's history. There is a huge move in stock price coming on this monthly basis. Tight bands, however, do not tell direction, only magnitude.
For price to catapult above 400 over the next couple months would take some uber good news. It seems difficult to think that price would explode higher but you never know. The neggie d is important. If price was ready to breakout higher, you would probably see indicators that are long and strong rather than negatively-diverged. In the near-term, January, the stochastics have a bit of juice but the assumption would be that the tight bands will probably start a wicked move lower for TSLA.
The ADX shows that the uptrend in price was a very strong trend until 2016 and despite the buoyancy in price the last three years, Tesla is NOT in a strong uptrend. The Aroon is set up for the potential bearish action ahead. Once the red line crosses above the green line it is lights-out.
The two large volume candles get your attention. That must have occurred during positive news bite hype announcements. Price will want to revisit this price range, which it has this month, and the volume is far lower although higher than November. Tesla may have another pop left in it that firmly tags the upper band but the expectation would be for the stock to roll over in 2019.
Early next year in Q1 and Q2, TSLA may want to seek the 180-280 range again, and then fall through that range in the back half of 2019. Keystone has no position but if price bumps higher to begin the year, it may be a good short, if there are shares available to short. If you made money in Tesla stock, even if you did not, but you are holding TSLA long, get out of it. By summertime, you will likely look back and be extremely glad you did. In 2020, it would not be surprising to see TSLA down to the 50-120 range. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
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