Tesla Stock News and Forecast: TSLA jumps back above $300 amid a firm rebound

Update: Having witnessed a bearish opening gap and ended marginally lower on Tuesday, Tesla (TSLA) shares rebounded firmly on Wednesday. In doing so, the stock price of the electric vehicle (EV) giant gained 3.62% to settle above the $300 mark. The shares rallied as high as $306 but eased slightly towards the NY close. Investors cheered news that Twitter shareholders gave the green light to Elon Musk's $44 billion acquisition deal. Additionally, Tesla shares tracked a tepid recovery on Wall Street after Tuesday’s steep losses fuelled by hotter-than-expected US inflation data. Meanwhile, Tesla buyers ignored Wall Street Journal (WSJ) report that Tesla has sought to halt battery cell manufacturing plans in Germany in order to qualify for tax credits in the US.

Tesla (TSLA) actually outperformed on Tuesday, an unusual occurrence for a high beta, volatile name. Perhaps the recent stock split has helped calm things down, or attention has shifted to other big tech names: Apple and Alphabet -6%, Amazon -7%, and Facebook -9%. 

Tesla stock news

There is not a lot of stock-specific news to overpower the macro narrative from yesterday. Just in case you are off the latest shuttle from Mars, here is a brief recap. Most market participants (your author included) expected inflation to fall in this latest print. Commodity prices are lower across the board, and comparisons looked favorable. That was not the case, however, as inflation is now endemic and broad-based. This is a bigger problem, and it will be harder to slow. At least I did point out that the risk-reward trade was to the downside in the event of a surprise.

Off we went on a massive risk de-escalation. This meant dollar up, bonds and equities down. Bitcoin also plunged. Tesla is a high growth, high duration stock, meaning it is more susceptible than most to changes in interest rates. This is why the Nasdaq as a whole outperforms when we get all doveish and underperforms when we get hawkish. Now we are all hawks, so expect more pressure on equities and for the Nasdaq to underperform. 

Tesla stock forecast

The double top at $314 is still in place then, and now the immediate target is the small double bottom at $266. That led to the current rally, but this reversal has led to an island formation. An island is where one period's price action has a gap on either side, so essentially one candlestick or bar is isolated. In the case of Tesla, Monday is a clear island. Islands are powerful reversal signals. Small support at $281, but $266 is the more important level. Break that and $240 will be the target. Resistance at $314 would return the trend to the upside, but that seems unlikely. $290 is the pivot.

TSLA daily chart

Previous updates

Update: Tesla (TSLA) rallied and recovered from the prior daily candle lows, reaching back into bullish territory for a fresh corrective high of $306.00 while US stocks rose on Wednesday in general following a shaky trading session as August producer prices came in line with expectations. In fundamental news, as per the Wall Street Journal, Tesla has sought to halt battery cell manufacturing plans in Germany in order to qualify for tax credits in the United States. WSJ cited, “people familiar with the matter”, who said the Texas-based automaker is aiming to take advantage of clauses within the Inflation Reduction Act that it could qualify for if domestic battery production is increased.