Tesla share price spiked in the premarket trading as Elon Musk excited investors. The stock is now trading at $995, which is slightly below the important milestone of $1,000. The stock is rallying at a time when the Dow Jones and Nasdaq are falling ahead of the Fed interest rate decision.
In a statement earlier today, Elon Musk excited investors when he talked about the semi truck that he unveiled a few years ago. In a leaked memo, he said that it was time for the company to start producing the truck in large numbers. He said:
“Production of the battery and powertrain will take place at Giga Nevada.”
The semitruck is an important part of Tesla, as it attempts to become the biggest automaker in the world. The truck will help it diversify its sales as the world moves to electric vehicles.
The leak came at a time when hysteria is surrounding another electric truck company. Shares in Nikola, an electric truck company that has never sold a truck has gained by more than 300%. It is now valued more than Ford, the iconic American brand. As a result, the CEO is now worth more than $10 billion, in a sign that euphoria has returned to the market.
Tesla share price rose also because of a bullish investor. In an interview yesterday, billionaire Ron Baron said that he was optimistic that the company’s share price would continue to soar. As one of the foremost Musk defenders, Baron said that he expected the company’s valuation to reach more than $1 trillion in the next few years.
He argues that Tesla is not only a car company but a real technology company that has built a platform that most of its peer companies will find difficulty crossing. For example, Tesla has the largest network of charging systems, is building quality cars, and has a large energy business.
Download our Q2 Market Global Market Outlook
On the daily chart, Tesla share price is above the 50-day and 100-day exponential moving averages. It is also a few inches below its important resistance of $1,000. The RSI has moved above the overbought level but it is not extremely overbought. This implies that the stock will likely continue rising as bulls remain in total control.
On the flip side, a move below $781 will invalidate this prediction. This price is along the 50-day exponential moving average.