Tesla Stock News and Forecast: TSLA rallies on Cybertruck news despite China recall

Tesla stock rallied over 1% on Thursday as the market recovered.
TSLA stock rallied despite news of another vehicle recall in China.
The EV automaker giant announced a record delivery day last weekend.

Ivan Brian FXStreet

Tesla (TSLA) stock gained over 1% on Thursday in a combination of broad market recovery and follow-on from some strong delivery data last weekend. Tesla however remains on watch for further losses as it has failed to break the previous high and remains in a medium-term downtrend from a technical perspective.

Tesla (TSLA) stock news: Musk announces new Cybertruck

The big story from Thursday was the announcement of the imminent Tesla Cybertruck. This has long been on the wish list of consumers and Tesla investors and Elon Musk gave more details when he opened Tesla's new giga-factory in Texas on Thursday. Musk said the Cybertruck will be made at the new Texas plant: “Cybertruck is coming next year and will be made in Texas,” Musk told a raucous crowd. "We are entering a new phase of Tesla's future with six factories. We are scaling to extreme size.”

This is positive news and builds on the record deliveries that Tesla announced last weekend. Tesla delivered 310,000 vehicles in Q1 which kist missed analyst estimates but still showed continued growth with a jump of 68% on the same period last year. Scaling to extreme size appears to be on track. Tesla has opened a new giga-factory in Berlin and now Texas to meet demand. EV demand was growing throughout 2021 but 2022 has seen a marked acceleration in EV demand as oil prices spike to multi-year highs following the Russia Ukraine conflict.

We currently find ourselves in an inflationary environment and Tesla has made repeated price hikes of late to combat rising input costs. Again on Thursday, we got news of another Model 3 price hike in the US. Companies with the power to pass on price rises to customers without hurting demand will outperform in the current environment. This is a tricky balancing act but Tesla is fortunate in that demand is likely to outstrip supply as EV adoption grows. It has a first-mover advantage in that it basically invented the EV market. Tesla did see some bad press also on Thursday but investors appeared unfazed by news of a recall in China.

Tesla stock forecast: TSLA remains in a classic downtrend

Nothing has changed from a technical perspective. The chart remains in a classic downtrend with a series of lower lows and lower highs. The most recent lower high at $1152 is the pivot. Below there TSLA stock is bearish, above and it is time to rethink. The recent spike in markets and Tesla saw multiple overbought signals from the RSI and MFI (money flow index). The slower MACD is now also moving to crossover giving us a third bearish signal.

TSLA stock chart, daily

*The author is short for Tesla

Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

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