Biden’s presidency will boost Tesla
What happened?
Good news for Tesla! The tech giant is going to benefit from Biden’s presidency as the new president stated the objective to make the USA the leader in electric vehicle production. Trump withdrew the United States from the 2015 Paris Agreement, which focuses on goals to help mitigate climate change. On the contrary, Biden plans to rejoin the accord during the first day of his administration. It will show his severe intentions about green energy.
Moreover, the widely-anticipated stimulus package from Biden has already improved the market sentiment and underpinned demand for riskier assets and especially stocks. In addition, Treasury Secretary nominee Yellen urged lawmakers to ‘act big’ in the support actions, which added to the overall risk-on sentiment as well.
Obviously, Tesla doesn’t need Biden to help the company’s growth. Musk’s automaker performs greatly on its own. Notably, shares rose by 800% since the start of 2020, which made Tesla the most valuable auto company in the whole world.
Is Tesla overbought? Yes, might be, but it keeps going up no matter what, and its rally is not going to stop in the medium term. Tesla has big plans. For instance, it plans to increase its vehicle sales volume from about 500 000 in 2020 to 20 million annually over the next decade! By the way, Tesla has recently started delivering locally-produced Model Y crossovers in China. Since China is the world’s largest electric-vehicle market, it is a great step for Tesla towards its growth plans.
Technical analysis
After a long rally, Tesla has taken a breath and has formed the symmetrical triangle pattern on the hour-chart. After the pattern was implemented, we should wait for the breakout to the downside, or to the upside. The price is just under the 50-period moving average of $845.00, which shouldn’t be an obstacle for the further stock growth amid the overall risk-on sentiment. The breakout will drive Tesla to the high of January 15 at $860.00 and then to the all-time high at $880.00. Support levels are $825.00 and $810.00.
