Tesla Stock Price and Forecast: TSLA shares climb 3% in premarket despite safety investigation

UPDATE: Early Wednesday morning the National Highway Traffic Safety Administration (NHTSA) announced a safety investigation into 580,000 Tesla vehicles sold since 2017 that come equipped with video games that can be played on the center console touchscreen. The NHTSA says that prior to December 2020, the games could only be played when the vehicle was in park. Starting a year ago, however, the agency claims the games were made available to the front passenger when the vehicle was in drive, which "may distract the driver and increase the risk of a crash," the NHTSA said.

Tesla (TSLA) stock is adding onto its price spike on Tuesday with another 3.7% to $973.65 in Wednesday's premarket. This premarket bump is significant in that it moves the Tesla stock price above its descending top trend line, which has been in place since December 1. If the open market on Wednesday responds in the same manner, then eclipsing December 17's swing high at $960.61 will confirm that a trend reversal is underway.

Tesla Stock News: Musk says he 'sold enough'

If you were not paying attention due to all things Christmas, Tuesday brought on a kind of Santa rally after Monday's Omicron fears subsided and a holdout US senator changed his tune on President Biden's Build Back Better legislation.

On Tuesday on a podcast with The Babylon Bee, Tesla CEO Elon Musk said he had "sold enough" TSLA stock to meet his 10% promise that he made on Twitter in early November.

“I sold enough stock to get to around 10% plus the option-exercise stuff, and I tried to be extremely literal here,” said Musk.

This helped the stock reverse from a low of $886.13 to above $938. Musk's admission means the CEO may be ending his selling spree that has caused the share price to drop from a high of $1,243 to below $900 in a month and a half. 

An SEC filing on Tuesday showed that Musk exercised 2.09 million options and sold more than 580,000 shares. Musk has now sold at least 13.5 million shares, and he claimed on Monday that his tax bill would hit $11 billion due to the share sale. Critics concur that Musk needs to offload about 17 million shares to meet his vaunted 10% threshold, but due to options Musk may be tabulating the 10% differently. 

TSLA key statistics

Market Cap	$1.02 trillion
Price/Earnings	330
Price/Sales	25
Price/Book	38
Enterprise Value	$1.02 trillion
Operating Margin	10%
Profit Margin	7%
52-week high	$1,243.49
52-week low	$539.49
Short Interest	3%
Average Wall Street Rating and Price Target	Hold, $849.64

 

Tesla Stock Forecast: is this a reversal?

Tesla price has faced resistance from a descending top trend line that began on December 1. That trend line sits at around $937. Tuesday's price surge stopped just above this point. Wednesday's premarket price, however, is above $970 at the time of writing. This portends that in Wednesday's proper market session, TSLA shares will put an end to this trend's tyranny. 

To confirm the reversal, TSLA price must close above the December 17 swing high at $960.61. Further confirmation that the three-week price decline is over would be a close above the December 16 high of $998.54. The Relative Strength Index (RSI), currently at 44, needs to rise above 50 if this bull market is to continue. The Moving Average Convergence Divergence (MACD) has crossed over on the 4-hour chart, but this means little until the same happens on the daily chart.

TSLA 4-hour chart

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