The Tesla stock price turned positive on Monday after Joe Biden announced a new financing deal to help with the ongoing battery shortage in the US. TSLA shares rose by over 3.7% on Monday even after reports emerged that Elon Musk had sold billions of shares to fund his Twitter acquisition. Other EV stocks like Rivian, Lucid, and Fisker rose. Similarly, legacy automakers like General Motors and Ford also did well.
The Biden administration announced plans to spend $3.6 billion to help with the ongoing battery shortage in the United States. The funds will be deployed from the $1 trillion infrastructure package passed last year. The goal is to ensure that the country is independent when it comes to batteries since most of the raw materials that make batteries come from unfriendly countries like China and Russia. These funds will go to companies seeking to manufacture battery technology in the country.
The Tesla stock price rose even after Elon Musk continued dumping the stock in a bid to fund his acquisition of Twitter. He has already sold stock worth over $8 billion on top of the $22 billion he sold last year for tax-related reasons. Still, Elon is the biggest individual shareholder in the company, with a stake valued at over $147 billion.
Tesla stock is rated a strong buy by most Wall Street analysts because of its strong market share in the EV business and the fact that its products are still being bought by thousands of people every month. In the most recent quarter, Tesla had an adjusted income of over $3.7 billion and revenue of over $18.8 billion.
Tesla stock price forecast
The four-hour chart shows that the TSLA stock price has been underperforming recently as Elon Musk has continued selling shares. The stock is trading at $902, slightly above last week’s low of $820. It has moved slightly below the 50-day moving average. A closer look reveals that the stock has formed a bearish flag pattern.
Therefore, there is a likelihood that the Tesla stock price will continue falling in the near term. If this happens, the next important support level to watch will be at $750. A move above the resistance at $766 will invalidate the bearish view.