Tesla Stock Price and Forecast: TSLA rallies on as Russia fears ease, but can Rivian and Lucid follow?

Tesla stock gained on Monday as EV stocks recovered ground.
Volatility is still the main driver, but Russia fears could see a relief rally.
Rivian and Lucid also make decent gains on Monday.

Ivan Brian FXStreet

A relief rally is likely for Tuesday's session as news reports emanate of a possible de-escalation in the Russia-Ukraine affair. Reports seem to indicate that some Russian deployments have returned to their bases. Russian President Putin and German Chancellor Scholz met today, and Russia said cooperation with Germany is a top priority and that Russia is a reliable energy partner. This news should see a greater risk-on rally in equity markets, which have been beaten up pretty badly of late. This will at least allow some uncertainty to be removed. Now the focus will return to the Fed meeting in March.

Tesla Stock News

Electric vehicle stocks held up surprisingly well on Monday despite heightened volatility and risk aversion. This situation would usually lead growth and tech stocks to suffer, and we would have expected Tesla (TSLA), Rivian (RIVN) and Lucid (LCID) to fall significantly. So the move on Monday is a bit surprising and perhaps an early indicator that a short-term bounce may be imminent. This is not just the case in EV stocks but also too in the main indices.

However, the main reason behind the gains on Monday in EV stocks appears to have been news that hedge fund billionaire George Soros took a decent stake in Rivian through his Soros Fund Management. The stake was reputedly worth up to $2 billion, but we should caution that the data ends in December 2021. We have no idea what may have happened since. Even if the stock is still held, it has nearly halved in value. Following a two-month-old filing is not exactly sound investment theory.

Tesla and EV stocks also had quite a lot of Superbowl exposure, which is more and more significant in the new retail-dominated trading world. These are momentum stocks, and this definitely helped momentum. Piper Sandler also raised its price target for TSLA shares on Monday. This positive news saw Tesla stock up 1.8% on Monday, but Rivian stock gained 6% and Lucid stock closed a matching 6% higher.

Ordinarily, we would be questioning this rise, but as mentioned EV stocks are heavily skewed toward momentum and not valuations or fundamentals. The lessening of geopolitical tensions between the West and Russia should see this momentum run for another day, assuming we do not get another twist in the tale. There was some mild panic when Ukraine's President said yesterday that Russia would attack tomorrow. This was later put down to a "lost in translation" use of sarcasm. Wow, tread carefully then.

Tesla Stock Forecast

Regardless, we still remain in the chop, and this is likely to be the way of things for the rest of the week. For now, we feel a moderate risk-on tone and note the dollar, gold and oil all losing ground today as indicative of that. European equity indicies are positive, so if nothing dramataic happens geo-politically, we remain on the long side for now. That could open yet another test of $945 for Tesla. That and $824 remain the pivot points.

Tesla (TSLA) chart, daily

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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