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Tesla Stock Nears Key Resistance Level

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Tesla stock rally

Tesla (TSLA) stock has inched up over the last five sessions. At 2:10 ET today, the stock was trading at $355.20 with 3.1% gains for the day—not far from a key resistance level of $358. Other auto stocks (XLY) General Motors (GM), Ford (F), and Honda (HMC) were down 2.1%, 1.2%, and 0.8%, respectively. Let’s take a look at some highlights that could be driving the recent price rally in TSLA.

Key factors

According to a recent SEC filing, Tesla CEO Elon Musk bought another 72,500 TSLA shares within a price range of $342.77 to $347.00. This move could suggest Musk’s optimism for the company.

On June 5, Tesla held its annual shareholder meeting, where Musk displayed his usual optimism. During the meeting, Musk suggested the company is likely to achieve its 5,000 Model 3 units per week production target by the end of the second quarter. His expectations were based on recent improvements in the Model 3 general assembly line and the addition of another new general assembly line, which he claimed was much faster than the previous two lines.

According to a recent tweet from Musk, Tesla laid off 9% of its salaried employees earlier this month in an effort to approach its target of profitability as early as later this year. This move comes after he reiterated TSLA’s expectation to report positive GAAP (generally accepted accounting principles) net income and positive cash flow in Q3 and Q4 2018.

Investors’ high expectations for TSLA’s Q2 Model 3 production rate and 1H18 financials after Musk comments could be the main reason for this consistent surge in TSLA stock lately.

Key technical indicators

$358 should continue to act as a key horizontal resistance level in Tesla stock. Any early violation of this immediate resistance could attract new buying and take the stock price toward its all-time high of $389.61, which should act as the next key resistance level going forward.

Please visit our Autos page to learn more about Tesla’s shareholder meeting and other auto industry updates.

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