Source: PaxForex Premium Analytics Portal, Fundamental Insight
October 10 could mark a critical milestone in Tesla's journey. In just two weeks, investors will gain insights into the future of Elon Musk's electric vehicle (EV) enterprise. With high stakes at play, the margin for error is minimal.
The upcoming event, dubbed "We, Robot," holds significant implications for Tesla. The company has been diligently developing its autonomous driving platform, known as Full Self-Driving (FSD), and this event may provide a glimpse into how this technology could influence the company's trajectory.
Musk has previously referred to Tesla's autonomous driving initiative as "Robotaxi" and "Cybertaxi." The anticipation surrounding this event has escalated, particularly since it was initially scheduled for August but has been postponed by three months.
One of the key reasons for the heightened importance of the Robotaxi event is the expectation that it will showcase Tesla's advancements in artificial intelligence (AI). Self-driving cars can be viewed as sophisticated computers driven by AI and robotics. FSD and the Robotaxi initiative are viewed as significant growth catalysts that could reignite interest in Tesla's EV offerings and open new avenues in markets like ride-hailing, car rentals, and delivery services.
However, if the Robotaxi event fails to impress or if any unforeseen issues arise, skeptics are likely to question Tesla's capital expenditures (capex) and investments in research and development (R&D).
Reflecting on past experiences, the 2019 unveiling of the Cybertruck serves as a reminder. During its launch, a demonstration by Tesla’s head designer, Franz von Holzhausen, went awry when a ball was thrown at the truck’s "armor glass" windows, resulting in them breaking - an unexpected and embarrassing moment.
While this incident caused some reputational damage and delays, it ultimately did not hinder Tesla's success. The Cybertruck has performed remarkably well in the market, even surpassing competitors like Ford and Rivian in EV pickup sales.
Although a misstep during the Robotaxi event would not spell disaster for Tesla, the implications differ significantly from the Cybertruck incident. Unlike the Cybertruck, Tesla's future is intricately tied to its AI capabilities. Musk has framed Tesla as a robotics company, and a failure to deliver the Robotaxi at scale could expose vulnerabilities in the company's long-term growth narrative.
As of September 25, Tesla's stock has surged by 22% during the month, indicating that momentum traders are attempting to capitalize on the volatility leading up to the Robotaxi event. However, following day traders into momentum plays can often lead to unfavorable outcomes.
Investors are advised to observe the Robotaxi event closely to assess what Musk and the team will present. Momentum following the event is likely to dissipate, providing investors with opportunities to acquire Tesla shares at more attractive valuations once the company's AI initiatives demonstrate tangible results.
As long as the price is above 240.00, follow the recommendations below:
- Time frame: D1
- Recommendation: long position
- Entry point: 256.91
- Take Profit 1: 270.00
- Take Profit 2: 285.00
Alternative scenario:
If the level of 240.00 is broken-down, follow the recommendations below:
- Time frame: D1
- Recommendation: short position
- Entry point: 240.00
- Take Profit 1: 230.00
- Take Profit 2: 220.00
