- 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.
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.
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.
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