Raising bets against the bears
Self-made billionaire and Tesla (TSLA) CEO Elon Musk seems to avoid pessimism, especially when it comes to his businesses. On May 7, he spent about $10.0 million of his own money buying Tesla stock when it was trading around $300.00 per share.
Musk still seems optimistic about the company’s future, as he raised his bets against Tesla bears on June 12 and June 13. According to a recent SEC filing, Musk bought another 72,500 TSLA shares on these two dates at a price of $342.77–$347.00.
Tesla’s recent price rally
When Musk bought $10.0 million in Tesla shares in May, the stock was trading on a mixed to negative note. Its stock was somewhat bruised from Model 3 production (XLY) concerns along with rising competition from General Motors (GM), Ford (F), and Fiat Chrysler (FCAU).
At the time, Tesla stock was struggling to violate a prior key resistance level near $308.00. It did violate that level on June 6, the day after the company’s annual shareholder meeting.
On the daily price chart, Tesla stock closed above its 200 SMA (simple moving average), which reached $322.77 on June 13. For the last three consecutive sessions, its price has sustained above this SMA level and could be an early sign of a positive trend. The 200 SMA is considered one of the most important technical indicators, as it’s widely followed by investors and traders around the world.
Tesla’s 14-day RSI (relative strength index) entered overbought territory with a reading of 71.9. In general, the overbought RSI level indicates underlying strength in momentum and also indicates the possibility of a short-term price correction. TSLA is currently hovering just below an important resistance level near $358.00, and any early violation of this level could attract fresh buying in the stock.
Next, we’ll look at analysts’ recommendations on Tesla stock.