While Tesla soars to over $1,000 per share, Facebook reports not entirely positive results

October 26, 2021 13:00

Yesterday there were undoubtedly two protagonists that took the attention of the markets for various reasons: Facebook's quarterly results and Tesla's surging share price.  

At the beginning of October, Facebook was in the news for the longest ever fall in its services and yesterday, the technological giant presided by Mark Zuckerberg was once again in the spotlight due to the publication of its results. If we look at these results, we can see that despite all the controversies in which it has been involved in recent weeks, Facebook has seen its number of users and profits increase, although its revenue was lower than expected by the market consensus.  

Specifically, Facebook obtained Earnings per Share (EPS) of 3.22 dollars and revenues of 29,010 million dollars compared to the 3.19 dollars per share and 29,580 million dollars expected respectively, so revenue was 570 million dollars lower.  

These results for the moment are being positively received by investors, as during the pre-opening Facebook shares are trading up close to 2.4% after rising during yesterday's session by 1.26%.   

As we can see in the daily chart, after breaking downwards through the important bullish channel that the price has been following most of the year, the price is suffering a strong retracement that has taken it to the 50% Fibonacci retracement level around its 200-session moving average in red, which act as the main support levels. The loss of this support level would open the door to a further price correction in search of $300 per share.  

On the contrary, if the price is able to form a floor at this support level, it could be a good starting point for a possible bullish rebound. However, for the moment it must face several resistances and possible legal problems that may arise from its latest controversies.  

Depicted: Admirals MetaTrader 5 – Facebook Daily Chart. Date Range: 1 September 2020 – 26 October 2021. Date Captured: 26 October 2021. Past performance is not a reliable indicator of future results. 

 

Evolution of the last five years: 

  • 2020: 33.09%
  • 2019: 56.57%
  • 2018: -25.71%
  • 2017: 53.38%
  • 2016: 9.93%

The second protagonist of yesterday's session was undoubtedly Tesla. The company, chaired by Elon Musk, managed to surpass the psychological level of $1,000 per share, thus joining the select club that includes companies such as Apple, Amazon, Microsoft and Google.  

Last week Tesla was in the news for its excellent quarterly results and during yesterday's session their shares soared 12.66% to reach 1,024.86 dollars per share. This rise is thanks to the strong momentum that has been seen over the last weeks in the stock market and their strong sales and orders data. As we have recently learned, the popular car rental company Hertz has announced the purchase of 100,000 Tesla vehicles to renew its rental fleet in an operation that will cost around 4.2 billion dollars.  

All these factors have caused companies such as Morgan Stanley to increase Tesla's target price to 1,200 dollars per share, so it could still have upside potential. If we look at the daily chart, we can see that, after making a double bottom formation at the lower red band, the price formed an important bullish channel that it had been following for the last few months until it broke above the upper band of this channel on 15 October and began a strong bullish rally.  

Since the beginning of September, share price has risen by 39.30%, although the biggest boost has occurred since the break of the bullish channel, as in just 10 days the price has risen by 25.24%.  

If we look at its technical indicators, we can see that the uptrend continues to be strong. However, the price is trading far away from its moving averages and its main support levels, so it is possible that we could see some kind of profit-taking retracement to continue its uptrend. As long as the price does not lose the level of 900 dollars per share, the general sentiment will continue to be bullish.  

Depicted: Admirals MetaTrader 5 - Tesla Daily Chart. Date Range: 1 September 2020 – 26 October 2021. Date Captured: 26 October 2021. Past performance is not a reliable indicator of future results. 

 

Evolution of the last five years: 

  • 2020: 743.40%
  • 2019: 25.71%
  • 2018: 6.89%
  • 2017: 45.69%
  • 2016: -10.96%

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Roberto Rojas
Roberto Rojas Financial Analyst, Admirals Spain

Roberto is a Financial Analyst with a European Financial Advisor certificate and a Double Degree in Business Administration and in Actuarial and Financial Sciences. In 2013 was graduated as an Expert Manager in Equities