Tesla (TSLA) is pulling back.
After exploding from $750 to a high of $1,209.75, the stock is down about $45 at the moment.
For one, the EV stock was overdue for a healthy pullback after a $500 move. It’s also wildly overbought on RSI, MACD, and Williams’ %R. Typically, when these indicators align in overbought territory, the stock will pull back.
Two, the deal with Hertz isn’t signed yet, according to Elon Musk.
In fact, according to a Musk tweet, “If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet” in reference to the rally.
However, according to Hertz, the Tesla order was made and deliveries are underway.
“As we announced last week, Hertz has made an initial order of 100,000 Tesla electric vehicles and is investing in new EV charging infrastructure across the company’s global operations,” noted a Hertz press release, as quoted by Yahoo Finance.
“Deliveries of the Teslas already have started, and consumer reaction to our commitment to lead in electrification has been beyond our expectations,” the company added.
Three, Tesla just recalled about 12,000 vehicles over software communication issues. Reportedly, the issue could cause a false forward-collision warning, or unexpected activation of the brakes, as noted by the National Highway Traffic Administration, as highlighted by CNBC.
With everything going on, investors may want to wait for the pullback to exhaust itself before taking a position. Once it does finish pulling back, we’d like to see Tesla closer to $1,500, as the electric vehicle story becomes even hotter.
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