Investor's Corner
Trending $TSLA: Remove the “noise”
Last week I introduced the MACD indicator. This week I will present a different way of displaying stock charts that works well with the MACD to help in forecasting future stock behavior.
Most profits and losses are generated when markets are trending. Market “noise” is simply all of the price data that distorts the picture of the underlying trend. This includes mostly small corrections and intraday volatility. Noise removal is one of the most important aspects of active trading. By employing noise-removal techniques, traders can avoid false signals and get a clearer picture of an overall trend.
The Heikin Ashi technique (“average bar” in Japanese) is one of many techniques used to remove noise and improve the isolation of trends to predict future prices.
Heikin Ashi charts are a type of candlestick chart that shares many characteristics with standard candlestick charts, but differs because of the values used to create each bar. I will not bore you with the formulas used to calculate the candlestick components (close, open, high, low). The Heikin Ashi formula factors in the current bar with an average of past bars in order to create a smoother trend. This process creates smoother price patterns that are much easier to read.
Daily Heikin Ashi charts are used to display “pay-day cycles” that display the daily trends, without the “noise.”
Take a look at the difference between the standard candlestick and the Heikin Ashi charts of TSLA stock for the past 5 months. First let’s take a look at the standard candlestick chart.
Candlestick Chart (Source: Wall Street I/O)
Now let’s take a look at the Heikin Ashi chart.
Heikin Ashi Chart (Source: Wall Street I/O)
Notice that in the latter chart the Jan.-Feb. and the May downtrends are more clearly visible, as well as the Feb-March huge uptrend gain.
In my trading I combine pay-day-cycles with the MACD. I make sure that the pay-day-cycle has turned positive (colored green in the chart above), and then I wait for the MACD to cross to the bulls to initiate a probing bullish trade.
Taking a look at today’s situation, this may be the first day of a green Heikin Ashi bar after 12 red bars. I also notice that the MACD is starting to flatten. We may be starting to form a bottom, and this could be the beginning of a potential reversal in the downtrend in TSLA stock, so I will be watching closely for an entry point when both indicators turn positive. Notice that in general the pay-day-cycle turns positive before the MACD does.
Heikin Ashi charts are now provided by most trading platforms: Wallst.io (select Chart Type – Pay Day Cycle), TD Ameritrade’s Thinkorswim (select Style – Chart Type – Heikin Ashi, Daily), OptionHouse (select Style: Heikin Ashi, Range: 6 Months, Frequency: 1 Day).
Also StockCharts.com offers free Heikin Ashi charts (enter TSLA, Chart Attributes, Type Heikin-Ashi, Update).
Source: StockChart.com
One interesting pattern that formed at the closed today is a “Doji”: a Doji candlestick looks like a cross, inverted cross or plus sign, and forms where a security’s open and close of the day are virtually equal. This often can be the precursor of a reversal. Secondly, the recent 50-day MA (Moving Average) move above the 200-day MA occurred a couple of weeks ago (see the chart above), again another usual precursor of a forthcoming bullish trend. And lastly, TSLA has support at the 206 level, from last November 2015. All of these are reasons to be bullish on TSLA, especially for short-term swing traders.
Is $TSLA going to reverse and move back up or will it start to compress, i.e. go sideways like it did in April? What do you guys think?
There are a lot of Tesla bulls out there who have astronomical expectations for the company, especially as its arm of reach has gone well past automotive and energy and entered artificial intelligence and robotics.
However, some of the most bullish Tesla investors believe the company could become worth $100 trillion, and CEO Elon Musk does not believe that number is completely out of the question, even if it sounds almost ridiculous.
To put that number into perspective, the top ten most valuable companies in the world — NVIDIA, Apple, Alphabet, Microsoft, Amazon, TSMC, Meta, Saudi Aramco, Broadcom, and Tesla — are worth roughly $26 trillion.
Will Tesla join the fold? Predicting a triple merger with SpaceX and xAI
Cathie Wood of ARK Invest believes the number is reasonable considering Tesla’s long-reaching industry ambitions:
“…in the world of AI, what do you have to have to win? You have to have proprietary data, and think about all the proprietary data he has, different kinds of proprietary data. Tesla, the language of the road; Neuralink, multiomics data; nobody else has that data. X, nobody else has that data either. I could see $100 trillion. I think it’s going to happen because of convergence. I think Tesla is the leading candidate [for $100 trillion] for the reason I just said.”
Musk said late last year that all of his companies seem to be “heading toward convergence,” and it’s started to come to fruition. Tesla invested in xAI, as revealed in its Q4 Earnings Shareholder Deck, and SpaceX recently acquired xAI, marking the first step in the potential for a massive umbrella of companies under Musk’s watch.
SpaceX officially acquires xAI, merging rockets with AI expertise
Now that it is happening, it seems Musk is even more enthusiastic about a massive valuation that would swell to nearly four-times the value of the top ten most valuable companies in the world currently, as he said on X, the idea of a $100 trillion valuation is “not impossible.”
It’s not impossible
— Elon Musk (@elonmusk) February 6, 2026
Tesla is not just a car company. With its many projects, including the launch of Robotaxi, the progress of the Optimus robot, and its AI ambitions, it has the potential to continue gaining value at an accelerating rate.
Musk’s comments show his confidence in Tesla’s numerous projects, especially as some begin to mature and some head toward their initial stages.
Elon Musk
Tesla director pay lawsuit sees lawyer fees slashed by $100 million
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
The Delaware Supreme Court has cut more than $100 million from a legal fee award tied to a shareholder lawsuit challenging compensation paid to Tesla directors between 2017 and 2020.
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
Delaware Supreme Court trims legal fees
As noted in a Bloomberg Law report, the case targeted pay granted to Tesla directors, including CEO Elon Musk, Oracle founder Larry Ellison, Kimbal Musk, and Rupert Murdoch. The Delaware Chancery Court had awarded $176 million to the plaintiffs. Tesla’s board must also return stock options and forego years worth of pay.
As per Chief Justice Collins J. Seitz Jr. in an opinion for the Delaware Supreme Court’s full five-member panel, however, the decision of the Delaware Chancery Court to award $176 million to a pension fund’s law firm “erred by including in its financial benefit analysis the intrinsic value” of options being returned by Tesla’s board.
The justices then reduced the fee award from $176 million to $70.9 million. “As we measure it, $71 million reflects a reasonable fee for counsel’s efforts and does not result in a windfall,” Chief Justice Seitz wrote.
Other settlement terms still intact
The Supreme Court upheld the settlement itself, which requires Tesla’s board to return stock and options valued at up to $735 million and to forgo three years of additional compensation worth about $184 million.
Tesla argued during oral arguments that a fee award closer to $70 million would be appropriate. Interestingly enough, back in October, Justice Karen L. Valihura noted that the $176 award was $60 million more than the Delaware judiciary’s budget from the previous year. This was quite interesting as the case was “settled midstream.”
The lawsuit was brought by a pension fund on behalf of Tesla shareholders and focused exclusively on director pay during the 2017–2020 period. The case is separate from other high-profile compensation disputes involving Elon Musk.
Investor's Corner
Tesla (TSLA) Q4 and FY 2025 earnings call: The most important points
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Tesla’s (NASDAQ:TSLA) Q4 and FY 2025 earnings call highlighted improving margins, record energy performance, expanding autonomy efforts, and a sharp acceleration in AI and robotics investments.
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Key takeaways
Tesla reported sequential improvement in automotive gross margins excluding regulatory credits, rising from 15.4% to 17.9%, supported by favorable regional mix effects despite a 16% decline in deliveries. Total gross margin exceeded 20.1%, the highest level in more than two years, even with lower fixed-cost absorption and tariff impacts.
The energy business delivered standout results, with revenue reaching nearly $12.8 billion, up 26.6% year over year. Energy gross profit hit a new quarterly record, driven by strong global demand and high deployments of MegaPack and Powerwall across all regions, as noted in a report from The Motley Fool.
Tesla also stated that paid Full Self-Driving customers have climbed to nearly 1.1 million worldwide, with about 70% having purchased FSD outright. The company has now fully transitioned FSD to a subscription-based sales model, which should create a short-term margin headwind for automotive results.
Free cash flow totaled $1.4 billion for the quarter. Operating expenses rose by $500 million sequentially as well.
Production shifts, robotics, and AI investment
Musk further confirmed that Model S and Model X production is expected to wind down next quarter, and plans are underway to convert Fremont’s S/X line into an Optimus robot factory with a capacity of one million units.
Tesla’s Robotaxi fleet has surpassed 500 vehicles, operating across the Bay Area and Austin, with Musk noting a rapid monthly expansion pace. He also reiterated that CyberCab production is expected to begin in April, following a slow initial S-curve ramp before scaling beyond other vehicle programs.
Looking ahead, Tesla expects its capital expenditures to exceed $20 billion next year, thanks to the company’s operations across its six factories, the expansion of its fleet expansion, and the ramp of its AI compute. Additional investments in AI chips, compute infrastructure, and future in-house semiconductor manufacturing were discussed but are not included in the company’s current CapEx guidance.
More importantly, Tesla ended the year with a larger backlog than in recent years. This is supported by record deliveries in smaller international markets and stronger demand across APAC and EMEA. Energy backlog remains strong globally as well, though Tesla cautioned that margin pressure could emerge from competition, policy uncertainty, and tariffs.
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Tesla to a $100T market cap? Elon Musk’s response may shock you
