Tesla Stock Price and Forecast: Why is TSLA stock so high?

Tesla stock falls again on Monday as Elon can't stop tweeting.
TSLA shares overdue a fall after huge gains for the last fortnight.
Tesla still hanging on to membership of the $1 trillion club.

Ivan Brian FXStreet

Tesla (TSLA) stock fell again on Monday just under 2%, and this latest fall puts it in serious jepoardy of losing exclusive membership of the $1 trillion market cap club that it shares with few others.

The stock has once again been under pressure following more tweets from CEO Elon Musk over the weekend about selling shares. Elon Musk sold a few billion dollars worth last week, with a further sale of 943k shares to meet tax obligations being reported this morning. The shares are now trading below $1,000 in the premarket, and so Tesla has lost its trillion-dollar status at the moment. While this one may look obvious, we did call for $1,000 to break late week when the stock was still near $1,200, so a 20% gain in a few sessions. It was not a bad call for us.

Tesla (TSLA) stock graph, 15-minute

Tesla (TSLA) stock news

Elon Musk likes to tweet. This is well established, but sometimes he gets himself into trouble with regulators. This time it appears to be JPMorgan who have taken offence as the US investment bank sues Tesla for $162.2 million, according to Reuters. The suit has origins in the tweetgate surrounding Elon Musk's tweets about taking Tesla private back in 2018.

JPMorgan and Tesla had entered into an agreement over warrants. "Though JPMorgan's adjustments were appropriate and contractually required," the complaint said, "Tesla has flagrantly ignored its clear contractual obligation to pay JPMorgan in full." Tesla did not respond to the Reuters report.

The Elon Musk/Michael Burry show also ramped up on Twitter after Elon Musk replied to Bury by saying he is a broken clock, presumably a reference to being right occasionally. Michael Bury had earlier said Elon Musk "doesn’t need cash. He just wants to sell $TSLA". Bury's firm, Scion Asset Management, had taken a bearish put position in Tesla, but filings on Monday show this position is now closed.

Tesla (TSLA) stock forecast

The chart has now regressed to the $1,000 support line, and early indications in the premarket are that Tesla shares may breach this too. The next support then becomes filling the gap at $910, the start of the recent price explosion. Once or if there, then it will be time to reevaluate. For now, resistance remains the 9-day moving average at $1,073 and then $1,120. However, we feel the short-term bearishness is set to continue, with just too many headwinds here for now.

TSLA 1-day chart

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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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