Tesla Motors Inc (TSLA) is one of 19 stocks that could be set to rally in the new year
With the new year just around the corner, you -- like many investors -- may be looking for potential stock picks for 2016. If so, you're in the right place. Below, Schaeffer's Senior Quantitative Analyst Rocky White provides a snapshot of 19 stocks that have the potential to rally in the upcoming year.
To qualify for the list, a stock must be in the green for 2015
and have outperformed the broader S&P 500 Index (SPX). What's more, these names have all seen short interest increase during the last year, while the percentage of analyst buys has decreased. In short, the 19 stocks are
technical outperformers that have experienced a rise in negative sentiment.
One stock we'll be eyeing in 2016 is
Tesla Motors Inc (NASDAQ:TSLA). While its year-to-date returns aren't particularly impressive, the shares have traced a series of higher highs and lows since mid-October. Specifically, since TSLA's mid-October low at $202, the stock has advanced over 16% to trade at $234.61, and is currently on track to close above its 100-day moving average for the first time since Sept. 25.
At the same time, however, negativity has been on the up and up, per the chart below. For one,
short interest has increased almost 19% in 2015 to represent 27.4% of TSLA's float. At the stock's typical trading volumes, it would take about two weeks to buy back these positions, suggesting the shares may be on the brink of a short-covering rally.
For another,
analysts have grown more skeptical of Tesla Motors Inc (NASDAQ:TSLA). The percentage of brokerages rating the stock a "buy" or better has fallen 30% in the last year, and now less than one-third sport an upbeat opinion on TSLA. A continued surge in the shares could prompt a round of analyst upgrades, adding fuel to the fire.
