Tesla reopened against Alameda County
Tesla surged after Trump’s tweet, but then dropped to the end of the trading session. What was the reason?
Brief background
Tesla’s plant is located in Alameda County, one of the six San Francisco counties. The stay-at-home order was set to expire on May 4, but the local county decided to prolong it till the end of the month.
The reaction of Elon Muck was:
To be clear, the state of California approved that Tesla can operate, but, according to Elon Muck, “an unelected county official illegally overrode”. Opinions were divided, some people were for reopening, some of them – against. However, the US president marked the end of disputes.
Later Alameda County Health Department announced that Tesla can reopen next week, if the company takes all safety recommendations.
What does it mean for a trader?
Some analysts on Wall Street don’t worry so much about this. They see this deal as a temporary problem that won’t affect Tesla’s success in the long-term. Tesla shares are up more than 240% over the past 12 months.
However, some analysts aren’t so bullish. According to analyst Craig Irwin, there is a “downside risk” to Tesla’s second-quarter forecasts. He recommends investors be wary of the stock.
Wall Street opinions on Tesla stock widely vary. Price targets range from roughly $300 to $1,000. The average analyst price target is $620, what is much lower current trading levels. The Dow Jones Industrial Average, at the same time, implies the increase of the average target price for stocks by 13%.
Technical outlook
The Tesla stock price had declined dramatically during March, but then it bounced back in April to its pre-crisis highs. Now the Tesla stock price is still above all moving averages. The levels support the continuation of the bullish trend. The resistant line is at 858. If the price manages to fall lower than 767, it may go down further to 675.
