Tesla Stock Price and Forecast: TSLA continues Thursday rebound, adds 2% in premarket

Tesla bounces strongly on Thursday as markets decide to ignore Ukraine.
TSLA stock gains 4.8% on general market bounce back.
Shares are up more than 2% in Friday's premarket.

Clay Webster FXStreet

Tesla (TSLA) shares bounced strongly on Thursday after dropping off a cliff due to Russia's invasion of Ukraine, Tesla is now charging higher in Friday's premarket. TSLA stock bottomed out at $700 after opening just above it on Thursday, before spending the entire session climbing back to $800. The stock closed at $800.77, a surprising 4.8% above Wednesday. It is now up 2% in the premarket near $820.

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Tesla Stock News: Odd trades

The latest news is a family affair. Trades made by CEO Elon Musk and his brother Kimble, who sits on Tesla's board, are being scrutinized by the Securites & Exchange Commission (SEC). The Wall Street Journal reports that Kimble sold $108 million worth of shares just one day before his brother Elon posted his infamous Twitter poll asking if he should sell 10% of his Tesla stake. Once the poll was answered strongly in the affirmative, Elon began selling. This caused an approximate 25% sell-off in the share price over the following month.

Daiwa Securities Group, Japan's second-biggest investment bank, plastered an outperform rating on the stock due to what it said makes the company more attractive due to the Ukraine-Russia affair. The Japanese bank gave TSLA a $900 price target, writing that "higher oil prices and potential scenario of fuel shortages, especially in Europe, could accelerate the shift to EVs. While the start of production at the Berlin plant could be delayed, recent media reports of Tesla increasing capacity at its Shanghai facility gives it more flexibility to meet European demand."

The bank also pointed to the company raising output at its Shanghai plant to 1 million units per year and increasing production to 500,000 units at its Austin plant. Currently, the Shanghai factory can produce about 450,000 units a year. One reason why increasing Shanghai output is key is that gross profit margins run at about 40% there, whereas the automaker's original factory in Fremont, California, has gross profit margins closer to 20%.

Last but not least, Tesla has lost its Director of Engineering, Brian Dow, to Generac Holdings (GNRC), a maker of energy storage systems and batteries.

Tesla Stock Forecast: Ukraine invasion provides $700 as support

One benefit of the rollercoaster ride that hit markets on Thursday is that shareholders now know where long-term support sits. Ahem, it is $700. There must have been enough automatic buying there to spur the price higher since shares were pushed up steadily to $765 by midday. The $700 mark is, however, right in line with a descending bottom side trend line in place since November 10.

The region around $945 is still the target to break back into bullish territory. This $945 mark has served as both support and resistance over the past four months going back to October. Before that, however, TSLA shares must close back above the 200-day moving average, which is now at $832.61. It broke through this moving average on Tuesday and may signal there is more downside ahead.

TSLA 1-day chart

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Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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