- Tesla Inc's shares are set to extend their gains amid founder Musk's court appearance.
- The celebrity billionaire has denied wrongdoing and said he hates managing the firm.
- NASDAQ: TSLA has topped two critical SMAs, painting a bullish picture.
Any publicity seems good publicity for Elon Musk – Tesla's founder has said that he "he rather hates" being the boss of the company, but investors seem to shrug their shoulders and buy more stock. Bulls seem to focus on the firm's launch of its Full Self Driving (FSD) capability.
The world's second-richest man's comments came in response to accusations that he forced TSLA shareholders to acquire SolarCity Corp, a struggling energy company also founded by Musk. Plaintiffs such as pension funds alleged that Musk pushed for a self-serving deal that would save SolarCity from bankruptcy, a move that was unfavorable to shareholders.
Why is Tesla stock up?
Investors may be seeing the court case as merely a small nusance or perhaps as a win-win for Tesla. In case Musk loses and is forced to pay money to the EV company, it would have more cash for future development. Keeping the erratic founder's hands tied when it comes to financial deals could also be beneficial – he would be able to focus on engineering that he loves and praised for. Musk's loss of temper during the first day in court may be a sign that plaintiffs may have the upper hand.
In the other scenario in which Musk wins the court case, he would have more leeway to do as he pleases. Tesla's profitable 2020 and elevated valuation already provides the EV company room to take on upstart rivals such as Lucid Motors, Nio and others.
Tesla Inc (NASDAQ: TSLA) has closed Monday's trade up some 4.38% at $685. Tuesday's premarket data is pointing to another move worth 1% or roughly $7 to $692. It is worth noting that the automaker also launched its FSD capability mentioned earlier – for now only to those who preordered it.
The promise of a self-driving car is exciting, and also comes with a high price tag of $10,000. It is still to be seen if FSD users report that it works or if it remains a risky business that could "do the worst thing at the worst time" as the company says. An accident could tumble TSLA, while early success could trigger massive lucrative sales.
TSLA Stock Forecast
NASDAQ: TSLA has recently surpassed the 50 and 200 Simple Moving Averages on the four-hour chart, a bullish sign. Moreover, the Relative Strength Index is still below 70, thus outside oversold conditions.
Back on June 23, shares shot higher and surpassed the 70 level on the RSI, resulting in a significant setback. The high watermark was $701, which serves as a cap for the stock price. Ahead of that level, it is worth noting the downtrend resistance line that towers over shares since they hit a peak of $772 in mid-April.
Some support awaits at $660, which is where the 200 SMA hits the price, and then at $621, which is the low point in July.. The next levels to watch are $571 and $548, which were cushions in in the spring.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stabilizes near 1.0800 as trading action turns subdued
EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.
GBP/USD extends sideways grind above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.