Tesla, Inc. (NASDAQ:TSLA) CEO Elon Musk in contempt for violating his settlement with the SEC last fall
Tesla (NASDAQ: TSLA) shares took a hit in after-hours trading on Monday, falling 5% as of 6:38 p.m. EST. The stock’s pullback was prompted by news that the U.S. Securities and Exchange Commission (SEC) has asked a judge to hold Tesla CEO Elon Musk in contempt for violating his settlement with the SEC last fall .
The news — and the stock’s subsequent pullback — highlights the risk factor the outspoken CEO’s frequent tweeting has morphed into over the last year.
Musk’s tweets are causing trouble again
Bloomberg explained the SEC’s issue with Musk:
The SEC claimed on Monday that a Feb. 19 tweet by Musk violated the settlement when he wrote that “Tesla made 0 cars in 2011, but will make around 500k in 2019.” The settlement with the agency required him to seek pre-approval from the company for social media posts and other written communication that would be material to the company or investors.
Tesla’s actual guidance in its fourth-quarter shareholder letter was unclear about how many vehicles the company expected to produce in 2019. The company did say, however, that it expects to deliver between 360,000 and 400,000 vehicles during the year.
Notably, the tweet was made after the trading day ended. In addition, Musk quickly corrected his forecast in a follow-up tweet later the same day, saying: “Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.”
The SEC cites Musk’s 24 million Twitter followers, which includes members of the press, as a reason the CEO’s inaccurate tweets are such a big problem.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 333.48.
The projected lower bound is: 261.34.
The projected closing price is: 297.41.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 20.9242. This is not an overbought or oversold reading. The last signal was a buy 0 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 43.18. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 114 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -81. This is not a topping or bottoming area. The last signal was a buy 0 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 2 period(s) ago.
Rex Takasugi – TD Profile
TESLA INC closed up 4.060 at 298.770. Volume was 17% below average (neutral) and Bollinger Bands were 60% narrower than normal.
Open High Low Close Volume___
297.910 302.904 297.000 298.770 6,626,522
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 303.74 319.39 316.26
Volatility: 33 72 73
Volume: 5,948,151 7,426,613 9,002,124
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
TESLA INC gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
TESLA INC is currently 5.5% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of TSLA.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on TSLA.O and have had this outlook for the last 3 periods.