New Tesla Price Target as Stock Makes 'Violent' Move on Robotaxi News

Shares of Tesla TSLA traded 8.23% higher on Monday, gaining more than $26 a piece on the day. This was the electric vehicle maker's largest single-day gain in more than two months. More than that, the rally added $95.7 billion to Tesla's market cap and boosted CEO Elon Musk's net wealth by a rough $12 billion. 

The rally came a day after Tesla launched its much-anticipated limited robotaxi service in Austin, Texas. It had been feared that this launch could be pushed further out. The fact that it came off seemingly without a hitch, obviously impressed investors and traders.

Large-scale adoption of autonomous vehicles across many services, not just taxis or ride-share is what Musk has been looking to as a key toward the future success of his company specifically, and electric vehicles more broadly. Incredibly, on Sunday, Musk posted to social media a video of himself speaking at the company's 2024 annual shareholder meeting drawing comparison between robotaxi services and firms like Airbnb ABNB and Uber Technologies UBER.

Speaking of Uber...

News broke on Tuesday morning that Uber Technologies and Alphabet's GOOGL Waymo had, in partnership, begun offering robotaxi services in Atlanta. The service covers approximately 65 square miles in downtown Atlanta, is available through the Uber app and pairs users with a Waymo electric Jaguar fully autonomous vehicle. This is an expansion of the service already offered in Austin, Texas, where Tesla is now competing. Amazon's AMZN Zoox is expected to eventually compete for this business as well.

Uh-oh

Apparently, auto safety regulators are investigating reports that on their first day in service in Austin, Tesla's autonomous robottaxis that are, for now, moving around with an emergency driver present may have violated several traffic laws. Videos shared online show these Tesla vehicles exceeding speed limits and there is at least one instance of a vehicle swerving into a lane it was not supposed to be in.

Tesla is not expected to report second-quarter financial results for about another month. Readers will remember that the company missed badly for the first quarter both on earnings and revenues. So far of the 19 sell-side analysts I can find that track the stock, all 19 have revised their second-quarter earnings estimates lower since the start of the period. 

It is possible that all of the "awful" had been priced in for now and now this flicker of optimism gives the firm's true believers some momentum. They had always been there, in almost cult-like fashion until Musk's recent foray into government service.

What Does the Chart Say? ​

​This chart has been bullish and is now becoming even more so. No, I am not long the stock. I missed this move. 

Readers will see the Double-Bottom pattern of bullish reversal from back in March and April. That setup worked like a charm, as the stock peaked at $367 in late May coming off of a 2025 low of $214 in early April. That's a move of merely 71%.

What I find wild is that coming out of that Double Bottom, the stock quickly went on to develop a pennant formation. The interesting thing about pennant formations is that after a series of higher-lows and lower-highs, they close and often produce an unpredictable, but violent move one way or the other. This pennant appears to have closed on Friday and that violent move came on Monday.

Relative strength is improving. The daily Moving Average Convergence Divergence is moving toward a bullish posture as well. Within that indicator, the histogram of the 9-day Exponential Moving Average is so close to moving above zero, while the 12-day EMA is so close to crossing above the 26-day EMA with both in positive territory. You get both of those moves and I think you'll probably still have a ballgame. The pivot in this case was the 21-day EMA, which was at $323 at the time of the breakout. 

My model puts Tesla's target price at $388.

At the time of publication, Guilfoyle had no position in any security mentioned.