The Daily Breakdown looks at whether Tesla, the worst Magnificent 7 performer this year, can start to catch up to the group.
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Weekly Outlook
As we approach mid-August, a few things jump on this week’s agenda.
First, weekend trading in Bitcoin had bulls wondering if new record highs were on the way. That’s as BTC cleared $122K and hit a high about $1,000 short of its record from last month. If momentum in this name continues, perhaps new highs could be in play this week.
Second, while Nvidia still hasn’t reported, a few other earnings reports stand out this week. They include Circle Internet Group, Cisco, CoreWeave, Cava, JD.com, Deere, and Applied Materials, among others.
Third, we have a couple of interesting economic reports, including Tuesday’s CPI report and Friday’s retail sales figures. The CPI report will give us an idea on whether inflation is continuing to creep higher, while retail sales will give investors the latest check-in on the consumer.
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The Setup — Tesla
Tesla has been the worst-performing Magnificent 7 stock so far this year, down about 18% as of Friday’s close. Along with Apple, it’s just one of two stocks within this group that’s down so far this year. However, bulls are hoping that Tesla stock can start to catch up to the rest of the group.
Tesla stock did well in April and in May, but has since fallen into a “wedge pattern” — defined by a series of higher lows and lower highs. Notice how each dip becomes more shallow, but each rally is lower than the prior high? That’s the wedge.
Now breaking out over the wedge, bulls are hoping this can help kickstart the stock and propel it higher in the weeks and months to come. If shares can clear the $335 area, which was last month’s high, Tesla stock could gain more momentum. On the flip side, a break back below $320 could have Tesla losing some steam.
Options
For some investors, options could be one alternative to speculate on TSLA. Remember, the risk for options buyers is tied to the premium paid for the option — and losing the premium is the full risk.
Bulls can utilize calls or call spreads to speculate on further upside, while bears can use puts or put spreads to speculate on the gains fizzling out and TSLA rolling over.
For those looking to learn more about options, consider visiting the eToro Academy.
What Wall Street’s Watching
Shares of C3.ai are plunging this morning, down about 30% as of 8:00 a.m. ET. The decline comes after the company announced preliminary fiscal Q1 results that badly missed Wall Street’s expectations. At current prices, shares are set to open at one-year lows. Check out the chart for AI stock.
Gilead Sciences was a big winner on Friday as shares hit new 52-week highs. The rally came after the firm reported better-than-expected quarterly results, beating on earnings and revenue expectations. Management gave a modest bump to its full-year sales outlook and announced a fresh $6 billion buyback plan. Dig into the financials for Gilead.
A lot of eyes are on BTC this morning, but Ethereum has been quietly working its way higher too. It hit $4,350 this morning, as bulls hope ETH can stay above the critical $4,000 area that has been resistance over the last few years. Ethereum is now at its highest price since December 2021 and is up more than 40% over the past month.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.