https://www.barrons.com/articles/tesla-stock-price-jumped-20-percent-why-it-is-soaring-51580820647
A snip:
"The biggest fundamental news anyone could point to Monday was an
earnings report from Tesla battery partner
Panasonic (6752.Japan). Management talked about profits from a North American battery facility and improving utilization. Profits on batteries for Panasonic is a sign battery costs are falling. It is good news because it means that everyone in the electric-vehicle value chain can make money, including Tesla.
But whether it’s 20% worth of good news is still debatable. After all, that works out to about $25 billion in Tesla market value.
That leads to the inevitable short-squeeze explanation for the violent stock rally. Tesla shares are more heavily shorted than average, meaning lots of bearish investors have borrowed stock and sold it, betting on price declines. If the price falls, they can buy shares back at a lower price, replace the borrowed stock, and pocket the price difference.
The shorts, in the case of Tesla, are getting slaughtered. Short interest data provider S3 Analytics notes bears have been covering short bets lately, but Tesla remains one of the most heavily shorted stocks in the market. The shorts lost more $2.5 billion on Monday alone. Year-to-date losses exceed $8 billion.
The
biggest risk traders see is the parabolic move in Tesla’s share price. Traders prefer stable, consistent gains. And when stocks get far away from their moving averages, traders start to worry. Stocks, of course, go up and down. And moving averages are levels where stocks often pause when rallying off lows, or dropping from highs. Tesla’s 50-day moving average is about $450 a share. It is unusual when a stock is about 100% higher than its 50-day moving average. That makes traders nervous.
On Tuesday morning, New Street Research analyst Pierre Ferragu
lowered his rating for Tesla to the equivalent of Hold from Buy. His target price for shares, the highest on the Street, is $800. He’s a longtime bull and believes in Tesla’s
technological lead in electric-vehicle production. Still, his new found conservatism couldn’t derail the stock rally."
