Tesla (TSLA) shares are benefitting from moves by the central bank of China as the country is the second largest market for their EV products.
In addition, investors are also “buying the rumor” ahead of the upcoming “robotaxi” event, set for October 10.
Testa shares broke into a volatility rally in early September as Elon Musk and analysts started talking more about the robotaxi event. That buzz has turned into a primary catalyst for the stock, driving prices 15% higher in just under a month.
The rally puts Tesla’s 50-day moving average into a bullish trend as positive momentum builds for the stock.
Watch for some volatility around the event – slated for October 10 – but any positive news and more importantly timelines will draw analyst upgrades and higher prices for Tesla.
Price target: $300
Growth Stock of the Week: Home Depot
Lower interest rates and higher demand for houses has Home Depot (HD) shares returning to a bullish trend.
Shares of the DIY Big Box hardware company had been on a slide through much of 2024 as consumer discretionary companies were suffering from high interest rates and high inflation. Over the last three months, those concerns have melted away, resulting in a return of investors to the name.
Last quarter’s earnings results were mixed as earnings beat expectations while revenue can in lighter than expected. Management forecast the same for the upcoming earnings report on November 12.
Despite the mixed outlook, investors are returning to the stock as shares’ 50-day moving average are now in a strong bullish trend.
Target price: $500.
Stock Under $10 of the Week: Nio
Shares of NIO (NIO) have been on a wild ride for the last three years as their price has gone from $60 per share to their current price of $6.52.
Over the week, China’s central bank announced another round of economic stimulus to aid in pulling the flagging economy out of its nosedive.
Those monetary stimulus actions are bolstering companies like NIO, along with Alibaba (BABA) and JD.Com (JD) as the moves should affect consumer activity in China.
Shares of NIO have been in a long-term bear market trend since January 2022 and remain in that trend for now.
That said, traders will take interest in the short-term volatile moves to the upside in NIO stock as an opportunity.
NIO stock is trading 12% higher in per-market activity on Monday morning (September 30), just below the stock’s 20-month moving average. This is the trendline that acts as the line of demarcation between a long-term bull and bear market.
With NIO’s 50-day moving average in a bullish trend below current prices, expect a move above that 20-month trendline – currently at $7.42 – to increase technical buying interest in the shares.
Short-term price target: $10.
Income Stock of the Week: AT&T
A shift in sentiment towards consumer activity puts AT&T (T) on the list of healthy income stocks.
Earlier this year, shares of AT&T had shown some weakness, but that changed in April as it became clearer that the Fed would be acting to lower interest rates in the second half of 2024.
Since then, shares have rallied 30% and are breaking to new all-time highs.
Shares of AT&T shifted into a long-term bull market trend in January of 2024 when they broke above their 20-month moving average.
Positive earnings reports in April and July fueled buying from investors as the company as worries over high inflation and interest rates also subsided.
investors have also started looking for higher dividend paying stocks to replace high yield savings accounts. That represents another strong tailwind for AT&T with its 5% yield.
Shares are breaking to new Highs ahead of the October earnings announcement meaning that we may see a little “sell the news” after the company’s October 23 earnings announcement.
Overall, the stock remains bullish with a price target of $30.
Bearish Stock of the Week: Ford
Downgraded by two different Wall Street firms, Ford (F) finds there shares in a position to continue a bearish decline for the next few weeks.
The stock has been stuck in a wide trading range since 2022. The reason, high interest rates and inflation, a deadly combination for any company who’s revenue is tied to financing expensive products.
Ford shares broke back into a long-term bear market trend two months ago as the stock dropped below $11.75.
The move was the result of a poor earnings report on July 23. The report showed the companies widest loss per share in the last five years and a shift away from their EV product development.
Shares are now trading below their 50-day moving average – which is in a bearish trend – and heading towards a critical test at $10.
Ford shares traded below $10 for a short set after July’s earnings results.
Another break below this key price will target a move to $8 before the company’s next earnings report on October 28.
Target price: $8
— Chris Johnson
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Source: Money Morning