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Why Tesla Stock Is Up Sharply on Wednesday

By Daniel Sparks – Aug 18, 2021 at 11:13AM

Key Points

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Did the stock's sell-off earlier this week go too far?

What happened

Shares of electric vehicle maker Tesla (TSLA -3.21%) are up sharply on Wednesday. As of 10:30 a.m. EDT, the stock had risen 3.5%.

There doesn't seem to be any material news behind the stock's move. But shares might be rebounding from a sell-off on Monday and Tuesday.

A chart showing a stock price rising sharply.

Image source: Getty Images.

So what

Shares of Tesla had slid a total of 7% on Monday and Tuesday amid news that the National Highway Traffic Safety Administration had opened a formal safety probe into Tesla's driver-assist technology, Autopilot. 

Perhaps some investors think the decline in the electric vehicle's stock went too far and are buying shares after the recent pullback. It's also possible that some investors who were shorting the stock are taking their gains and closing out some of their bets against shares by covering their positions.

Whatever the reason for the sharp gain today, there seems to be some technical support for the stock in the $670 and $680 range for now.

Now what

Tesla stock has been an underperformer in 2021. Shares are down 2.5% year to date, even as the S&P 500 has risen nearly 19%. But the automaker's business has been doing well. The company reported more than $1 billion in quarterly unadjusted net income for the first time in the second quarter. In addition, management reiterated expectations for deliveries to rise more than 50% this year. 

Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

Stocks Mentioned

Tesla Stock Quote
Tesla
TSLA
$174.04 (-3.21%) $-5.78

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