Tesla Shares Rallying Ahead of Musk Speech

Higher Pre-Market on Monday

Shares in the US alternative energy firm, Tesla, are trading almost 5% higher pre-market on Monday.

With traders gearing up for CEO Elon Musk’s speech on Tuesday, the outlook remains bullish.

Musk is due to speak as part of the firm’s “Battery Day.”

During the day, the firm will update investors on the advances within its work on energy storage. Stock watchers are anticipating that the speech will see Musk highlighting significant battery improvements.

Looking at the options market ahead of the event, traders are currently pricing in around a 17% move (two-way volatility) by the end of the week.

Recent Selling Seen

Tesla shares recently saw a heavy bout of selling, with the market plunging by over 30%.

This was both a response to a 5:1 stock split, as well as a reaction to news that the firm had been excluded from a group of companies joining the S&P500 index.

Expectations had been for Tesla to join the index after a year’s worth of consecutive quarterly growth. This growth had seen the firm’s stock prices soaring by 400%.

Tesla to Advance Further on Rivals

Industry commentators are touting the speech tomorrow as an opportunity for Tesla to consolidate its cost and technology lead over competitors such as General Motors and Volkswagen.

Electric car batteries cost more than those that power gasoline cars. However, we are expecting Tesla to confirm its ability to produce low-cost, long-last batteries. This would make their vehicles more acceptable and appealing to the mainstream market.

Musk announced via Twitter last month that his company is working on developing batteries with 50% more longevity over the next few years. If this is true, it could even be suitable for use in aircraft.

Tesla has a history of holding exciting investor events. And Musk himself has a reputation for enjoying the announcement of grand plans.

At the firm’s “Autonomy Investor Day” last year, he announced that driverless robo-taxis would be available in some parts of the US by the end of this year.

While most tend to take Musk’s announcements with a pinch of salt, the event is likely to help restore upside momentum in Tesla’s stock price.

Tesla Shares Moving Higher Again

Following the move lower from August highs, Tesla shares found demand into the test of the rising trend line from earlier 2020 lows and the 359.71 level support.

Price has now moved firmly back above this level. It is now once again approaching the 502.12 all-time highs.

While price holds above the bullish trend line, the near term outlook remains bullish with focus on an eventual breakout to fresh highs.