Tesla Stock Surges on Fresh Delivery Record, Bull Notes

The security sports attractively priced premiums at the moment

Digital Content Manager
Apr 5, 2021 at 10:49 AM
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The shares of Tesla Inc (NASDAQ:TSLA) are surging this morning, up 4.5% at $691.68 at last check, after the electric vehicle giant hit a delivery record of 184,800 units for the first quarter -- well above Wall Street's estimates of 177,822 deliveries. The tech name attributed the milestone to strong demand, which helped offset the impact of a global shortage of auto parts. 

Additionally, Wedbush upgraded the security to "outperform" from "neutral," and raised its price objective to $1,000 from $950. Cowen and Company and JP Morgan Securities followed suit, doling out price-target hikes to $573 and $155, respectively. Analysts were pessimistic towards the security coming into today, leaving the door open for more price-target hikes and/or upgrades going forward. Of the 20 in question, 12 called it a "hold" or worse. Plus, the 12-month consensus target price of $621.60 is a hefty 10.3% discount to current levels. 

Digging deeper, the security has taken a major step back from its Jan. 25, all-time high of $900.40. Shares have struggled with overhead pressure at the $720 level in the last month, though the 160-day moving average was able to contain two March pullbacks. Today's pop has also helped the security rise back above the 20-day moving average, and year-over-year TSLA is up 622.5%.

Though shorts are already hitting the exits, there is plenty of pessimism left to be unwound, which could push shares even higher. Short interest fell 6.2% in the last two reporting periods, yet the 44.73 million shares sold short account for 25% of the stock's available float.

Additional tailwinds could come in the from of a shift in the options pits. This is per Tesla stock's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands in the 84th percentile of its annual range. In other words, long puts are getting picked up at a faster-than-usual rate. 

What's more, TSLA options can be had at a discount at the moment. The equity's Schaeffer's Volatility Index (SVI) of 57% sits at the low 8th percentile of its annual range. This suggests the equity is sporting attractively priced premiums right now.

Lastly, the security's Schaeffer's Volatility Scorecard (SVS) ranks at a high 95 out of 100. This means Tesla stock has exceeded volatility expectations during the past year -- a good thing for premium buyers.

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