- Tesla stock rallies 3% in early trading on Wednesday.
- TSLA had suffered as the US announced an investigation into Tesla's autopilot system.
- Tesla shares once again take off from 200-day moving average.
Update: Tesla shares rallied 3% in the first hour of trading on Wednesday as the automaker shares recovered from some heavy selling on Monday and Tuesday. The rally was technical as Tesla stock had retreated back to the 200-day moving average and also an area of high volume which had helped to stabilize the price. Our call from this morning remains the same, buy the dip! "We would in our humble opinion be trying dips at $665 with a stop somewhere around $650. If that fails, then trying again at $620 with a stop at $609 would be plan B".
Tesla shares suffered another difficult day on Tuesday with the electric vehicle manufacturer seeing its shares tumble by nearly 3%. Tesla stock closed out Tuesday at $664.71 for a loss just under 3%. That loss followed on from Monday when TSLA shed over 4%. The catalyst has been news of Tesla's autopilot system being investigated by the National Highway Traffic Safety Administration (NHTSA). The situation worsened on Wednesday when reports that two US senators want the Federal Trade Commission to investigate Tesla.
"Tesla and (CEO) Mr. (Elon) Musk’s repeated overstatements of their vehicle’s capabilities...put Tesla drivers – and all of the traveling public – at risk of serious injury or death," Senate Democrats Richard Blumenthal and Edward Markey said in a letter to newly appointed FTC Chair Lina Khan.
"Tesla drivers listen to these claims and believe their vehicles are equipped to drive themselves – with potentially deadly consequences."
Plenty of headwinds then for those long Tesla, and recent sessions will have been painful. Tesla had been on course to test resistance at $780 with some nice technical momentum in play. The stock had broken out of a triangle formation, but with the benefit of hindsight this appears to have been a false break.
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Tesla key statistics
| Market Cap | $659 billion |
| Price/Earnings | 373 |
| Price/Sales | 25 |
| Price/Book | 29 |
| Enterprise Value | $753 billion |
| Gross Margin | 22% |
| Net Margin |
6% |
| 52-week high | $900.40 |
| 52-week low | $287 |
| Average Wall Street Rating and Price Target | Hold, $711 |
Tesla stock forecast
Tesla has retreated to test the 200-day moving average. This is a well worn moving average in Tesla's case. The stock has been trading along the 200-day since May and has rarely strayed too far from it. The poisitive is that Tesla has rarely managed to break significantly below the 200-day moving average. We have the added benefit now of a high volume zone providing adidtional support. We are not calling the bottom but calling the sell-off to slow with the potential for a bounce. The 200-day moving average support is at $665, Tuesday's close. Below that support at $620 is strong from the three rejections back in July and a strong volume profile. We would in our humble opinion be trying dips at $665 with a stop somewhere around $650. If that fails, then trying again at $620 with a stop at $609 would be plan B. This has been a market for buying the dip since the pandemic began and nothing appears to have changed yet.
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