Tesla (TSLA) Stock Is Up, Trading at around $550 after News of Restarting Production in May

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by Bhushan Akolkar · 3 min read
Tesla (TSLA) Stock Is Up, Trading at around $550 after News of Restarting Production in May
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Investors cheer up as Tesla plans to restart its production starting next month. Currently, Tesla is using its gigafactory assembly in New York to make ventilators for the COVID-19 patients. TSLA stock is trading at around $550.

The American electric-car-maker Tesla Inc (NASDAQ: TSLA) saw some major price recovery on news of restarting its production next month in May 2020. After a heavy beating in the market correction over the last month, the Tesla stock price recovered 20% over the last week.

On Wednesday closing, Tesla (TSLA) stock was trading at $548 with a market cap of $101 billion. Today in the pre-market, the stock price is $553 (+0.76%). The global outbreak of coronavirus had severely impacted Tesla’s production output. The COVID-19 which first spread in China had forced Tesla to shut down its gigafactory in Shanghai, started earlier this year in January 2020. This had put a brake on Tesla’s expansion plan.

Similarly, its production at the Fremont factory in California has halted over the virus outbreak in America. But on Thursday, market reports suggested that Tesla was to start its production back from May 4. This gave some hope to investors who have been worried about Tesla’s liquidity and its cash book.

With Wednesday’s move, Tesla’s year-to-date returns have once again turned positive at over 30%. The Tesla stock has remained largely volatile in 2020. Initially, after the Q4 2019 results, the Tesla (TSLA) stock price surged over 100% to hit its 2020-high of over $900. This market rally came in just the initial 40 days of 2020.

However, the global market correction caused TSLA to correct 50% from its high even going to negative year-to-date returns. But it has now recovered back from those levels. Despite the production cut down, Tesla has delivered around 88,000 vehicles in Q1 2020, 40% up over the last quarter.

Expert Views on the Tesla (TSLA) Stock

Bill Baruch, president of Blue Line Capital, has shared his views about the Tesla stock price with CNBC. Speaking to the publication, Baruch said:

“Tesla has a very well-defined floor at $400. This is where the 200-day moving average is. It also aligns with what was a previous ceiling. Until that breaks, you want to be buyer into $400, because at any point I feel that you could see a … gain up towards $600.”

He further added:

“There are some strong resistance levels up near $600, you have the [38.2%] retracement, the 50-day moving average, as well as the 50% retracement. So, I guess I would not press it out above there if you were to catch a nice swing in that manner”.

Gina Sanchez, CEO of Chantico Global, said that Tesla is a mix of both – volatility and versatility. Sanchez added:

“This stock is so overpriced but [CEO Elon Musk] has certainly shown his ability to get the job done, and to continue to produce. It has been a volatile stock, and that volatility continues because of the pessimism-optimism swing.”

However, we should take into account that the situation with the coronavirus outbreak is still very unpredictable. But its impact on the market is great. That’s why all the forecasts and expectations may turn completely wrong even in the short term.

Business News, Market News, News, Stocks, Wall Street
Bhushan Akolkar
Author: Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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