Tesla, Inc. (NASDAQ:TSLA) CEO Elon Musk notably expressed interest in buying some of the new shares

Tesla, Inc. (NASDAQ:TSLA) CEO Elon Musk notably expressed interest in buying some of the new shares

Tesla, Inc. (NASDAQ:TSLA) CEO Elon Musk notably expressed interest in buying some of the new shares

Electric-car maker Tesla (NASDAQ:TSLA) announced last week that it would raise as much as $2.7 billion in an offering of debt and equity — and Tesla CEO Elon Musk notably expressed interest in buying some of the new shares. Now a new SEC filing shows he followed through, loading up on the maximum amount of shares he said he was interested in buying.

The CEO’s move to buy shares comes as the stock is trading significantly lower than the last time he did so. This purchase, combined with Musk’s decision to hold on to his massive stake through the stock’s tumultuous run in recent years, highlights the CEO’s confidence in the company’s long-term prospects.

When Tesla first announced an equity and debt offering last week, Musk initially disclosed an interest in buying up to $10 million of Tesla stock. But the CEO updated his stance the next day, saying he was considering purchasing up to $25 million worth of stock.

Musk put his money where his mouth is. An SEC filing published on Tesla’s website on Monday revealed he bought 102,880 shares at a price of $243, or $25 million worth.

The CEO is getting shares at a discount compared to the prices he paid for the stock last year. As Barron’s points out, Musk bought nearly $45 million worth of Tesla stock on the open market last year, paying an average price of $331.

While there may be reasons to be critical when it comes to Musk’s leadership tactics, his commitment to being a long-term shareholder is not one of them.

Not only does the CEO have a near-20% stake in the company, he also has sold shares only to fulfill tax obligations. And Musk has publicly committed to being the last one to cash out, telling an audience in Germany in late 2013, “I will be the last one to sell shares.”

Of course, there’s no guarantee Musk will keep his public commitment to hold on to his stake. In addition, he will likely continue to occasionally sell shares to fulfill tax obligations or, perhaps, participate in charitable giving. But given his unwavering commitment to remaining a major Tesla shareholder so far, combined with his new $25 million purchase of Tesla stock, it’s unlikely Musk has any plans to sell.

Tesla shareholders may have had a rough run over the past year, with shares declining 15% as the S&P 500 index has risen 8%. But they can comfort themselves with the knowledge that Musk’s massive stake has similarly taken a hit. Further, with nearly a fifth of the company owned by Musk, you can bet he has a vested interest in trying to create long-term value so that the stock can eventually turn upward.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 280.99.

The projected upper bound is: 270.90.

The projected lower bound is: 221.15.

The projected closing price is: 246.03.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.

If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with TESLA INC), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 79.8504. This is not an overbought or oversold reading. The last signal was a sell 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 42.03. 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 6 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 -17. This is not a topping or bottoming area. The last signal was a buy 3 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 1 period(s) ago.

Rex Takasugi – TD Profile

TESLA INC closed down -8.280 at 247.060. Volume was 8% above average (neutral) and Bollinger Bands were 3% narrower than normal.

Open High Low Close Volume___
256.800 257.210 245.100 247.060 10,131,408

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 245.71 272.01 305.38
Volatility: 62 57 74
Volume: 15,465,248 10,967,491 9,583,171

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.

Summary

TESLA INC is currently 19.1% below its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. 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 17 periods.

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