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Home Stocks to Watch Don't Miss the Tesla Comeback

Don’t Miss the Tesla Comeback

Stocks ripped higher today, ending the market’s brutal losing streak with a bang. The Dow, S&P, and Nasdaq Composite all climbed in response to a combination of bullish forces that converged on traders today. Treasury yields fell alongside oil prices as WTI crude closed at a low ($81.94 per barrel) unseen since January.

The Atlanta Fed revealed today that its GDPNow estimator now predicts negative GDP growth for the US economy in the third quarter. GDPNow has been a very accurate predictor of GDP growth over the last few months.

Bulls celebrated the GDPNow report as we’re back to the “bad news is good news” narrative. The Atlanta Fed summarized its findings:

“After recent releases from the US Census Bureau, the US Bureau of Labor Statistics, the US Bureau of Economic Analysis, and the Institute for Supply Management, the nowcasts of third-quarter real personal consumption expenditures growth, third-quarter real gross private domestic investment growth, and third-quarter real government spending growth decreased from 3.1 percent, -3.5 percent, and 1.7 percent, respectively, to 1.7 percent, -5.8 percent, and 1.3 percent, respectively, while the nowcast of the contribution of the change in real net exports to third-quarter real GDP growth increased from 0.82 percentage points to 1.09 percentage points.”

But the biggest bullish surge came after Fed Vice Chair Lael Brainard commented on the Fed’s fight with inflation. Brainard started her speech with hawkish remarks before concluding on a dovish note:

“At some point in the tightening cycle, the risks will become more two-sided,” Brainard said.

“The rapidity of the tightening cycle and its global nature, as well as the uncertainty around the pace at which the effects of tighter financial conditions are working their way through aggregate demand, create risks associated with overtightening.”

That was apparently all bulls needed to uncork a buying frenzy into the close. Now, the S&P looks as though it’s about to begin another bear market rally.
The S&P even rebounded off support at 3,900 today. Whether that turns into a rally, however, depends on whether the market can build on today’s gains. If the S&P takes out today’s high (and, better yet, the 10-day moving average), bulls may have a real chance of taking the market higher.

And market-leading stocks like Tesla (NASDAQ: TSLA) should lead the charge. TSLA closed above its minor bearish trend (yellow trendline) this afternoon while also closing above the 10-day moving average.

TSLA also rebounded off the 50-day moving average after coming into contact with it several trading sessions ago. The stochastic indicator suggests TSLA has plenty of room to run, too.

For those reasons, it might make sense to take TSLA long with a trade trigger of $286.68, above today’s high, as the general market eyes a rally of its own.

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Michael James
Michael James has been an avid cryptocurrency trader since the very first Bitcoin was minted. With a background in technical analysis and long-term cycles, he's helped thousands of investors navigate the digital currency markets.

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