Tesla Inc. shares were volatile on Friday as the world’s most valuable automaker briefly erased its year-to-date losses after the stock surged for seven straight days.
The electric-vehicle maker’s shares have soared more than 30% in its latest streak, adding more than $200 billion to its market value. The gains were further boosted earlier this week after the company reported second-quarter deliveries that beat analysts’ average forecast.
While analysts were optimistic about these stronger-than-expected deliveries, it marked the automaker’s first consecutive quarterly declines in more than a decade. The automaker said Tuesday it delivered 443,956 vehicles in the second quarter, beating Wall Street analysts’ average estimate of 439,302 vehicles but down from previous quarters.
“The worst part is Tesla’s rearview mirror,” Wedbush Securities analyst Daniel Ives wrote in a note on Friday. “Very importantly, China appears to have staged a ‘small rebound’ in the June quarter.”
The Chinese government stated in a statement that a number of state-owned enterprises in Shanghai have purchased Tesla Model Y for commercial use. However, intensifying domestic competition has triggered price wars and demand concerns among EV makers this year.
Tesla has had a difficult year, with CEO Elon Musk announcing significant layoffs in April and subsequently further cutting the workforce by as much as 20%.
Tesla shares, which have been trading in a fairly tight range since early May, have finally broken out. The stock has broken above its 200-day moving average, a long-term trend indicator that traders closely watch.
To be sure, at least one technical indicator suggests a pullback may be coming. The rally has boosted the stock’s relative strength index, a measure of bullish and bearish price momentum, which ranges from 0 to 100, to over 80 in recent days.
Tesla shares were up about 0.9% at 10:05 a.m. in New York on Friday, after falling as much as 1.6%.
RSI levels this high are often seen as a sign that a decline is imminent, as buying has become excessive.
