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Tesla share price climbs up 5% ahead of AGM

The electric carmaker saw its stock rebound ahead of its AGM on Tuesday where Elon Musk will outline how the company plans to unlock growth.

Elon Musk will hope to quell investors concerns about the future of Tesla on Tuesday at the electric carmakers annual general meeting (AGM), with the company still struggling to hit its sales targets despite the hype around the launch of its new Model 3.

Tesla has had a particularly troubled start to the year, with the electric carmaker losing $700 million in its first three months of trading, driven by a significant drop in vehicle deliveries, prompting investors to grow concerned about consumer demand.

However, investors are clearly excited about its short-term prospects, with the carmakers stock rallying more than 5% on Monday ahead of the AGM.

Tesla rebounds ahead of its AGM, but for how long?

Tesla has gained ground ahead of its AGM, but the short-term bullish picture conflicts with an ongoing downtrend since January.

Tesla stock has continued t rise over the past few days, but the lower low of last week is still firmly in place. The price has fallen sharply since it broke below $248, with the range-bound trading of June 2017 – April 2019 resulting in a break to the downside.

Indeed the last part of this range forms the first part of the current downtrend in the stock. From a December 2018 peak at $380, the price has seen a sequence of lower highs and lower lows, forming a solid downtrend. A rebound towards trendline resistance would see the price head back to $237; this would also see it challenge the 50-day SMA (currently $237.94), which has acted as a barrier to further upside, as was the case in February and March.

Tesla’s short-term bounce may not last

In the short-term, the price has seen a substantial reversal, rallying to a high for the past month, and crucially moving above the $207.33 high of mid-May. A short-term bounce seems set to continue, as the hourly moving averages turn higher. A pullback towards $204 created a higher low, and from the current level the price could head back towards $231. A move back below $196 would reassert the bearish view on the hourly chart, and also suggest that a lower high had been created on the daily chart as well.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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