IBD Stock Analysis
- Tesla stock cleared an aggressive buy point of 730 on Monday.
- Earlier this month, shares bounced above their 50- and 200-day lines.
- The relative strength line is at the highest in nearly four months.
Industry Group Ranking
* Not real-time data. All data shown was captured at
1:46PM EDT on
Tesla (TSLA) is the IBD Stock Of The Day, as the EV maker remains in buy range after clearing an aggressive entry as a launch in the Indian market edges closer. Tesla stock rose.
On Monday, the company received local approval in India for the launch of four vehicles. That likely means some version of the Model 3 and Model Y were deemed roadworthy in India. This step was necessary to set the stage for the launch of sales in India. Tesla CEO Elon Musk has been pledging to enter the India market for several years.
But regulatory scrutiny in the U.S. is a concern for Tesla stock as CEO Musk continues to tout the electric cars’ driver-assistance technologies.
Earlier this month, shares bounced above a test at the converged 50- and 200-day lines, a bullish sign. Meanwhile, a deep large base continues to form.
Tesla’s relative strength line is slowly ticking upward, but it’s at the highest level in nearly four months.
With a Composite Rating of 92, Tesla stock is ranked first in the IBD automakers industry group.
Tesla Under Investigation
Tesla stock action has been resilient despite growing government scrutiny of its Autopilot capabilities.
The National Highway Traffic Safety Administration launched a formal investigation on Aug. 16 into 11 crashes that injured 17 people and killed one. The accidents involved first responders on the scene. In fact, last weekend a similar accident occurred in Orlando, Fla.
Additionally, on Aug. 18 lawmakers asked the Federal Trade Commission to probe what they consider Musk’s persistent misrepresentations, which they say endanger Tesla drivers and the driving public at large.
Despite the crackdown, Musk last week touted that Tesla’s next version of Full Self Driving beta software would be available to the wider public in about four weeks. Tesla’s self-driving capabilities are actually Level 2. Industry standards describe autonomous driving that doesn’t require driver assistance as Level 4 and up.
And like other automakers, Tesla continues to struggle with supply-chain issues due to chip and battery shortages.
Meanwhile, Tesla recently announced it planned to enter the Texas utility market. The Fremont, Calif.-based company’s Tesla Energy Ventures subsidiary applied to the Texas Public Utility Commission to “sell electricity directly to customers in Texas,” according to a CNBC report last week.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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