Tesla stock fell Wednesday, dropping below key technical support. The move followed a Reuters report that U.S. prosecutors were investigating whether the EV giant deceived investors regarding Full Self-Driving (FSD) capabilities, potentially committing securities and wire fraud.
Reuters exclusively reported Wednesday that the U.S. Justice Department (DOJ) was examining claims by Chief Executive Elon Musk and Tesla that possibly suggest vehicles can completely drive themselves autonomously. The report is based on three people who are familiar with the matter.
DOJ prosecutors are also looking to see if Tesla committed wire fraud and securities fraud by misleading investors about FSD, according to Reuters.
Tesla stock fell 1.7% to 174.72 in market trade on Wednesday. Shares undercut support at their 50-day moving average, but recovered to just below that line. TSLA shares moved above the 50-day line on April 29.
Tesla Stock Performance
TSLA shares jumped 7.7% last week to 181.19 after soaring 14.4% in the prior week. Tesla stock jumped 15.3% to 194.05 last Monday, making a decisive move above a key resistance level after regulators in China reportedly tentatively approved the introduction of FSD.
Since Tesla reported first-quarter earnings and revenue on April 23, TSLA shares have now gained about 23%. Tesla stock hit 52-week lows of 138.80 on April 22. Shares are still down 28.4% in 2024 as of May 8.
After rallying following Q1 earnings, Tesla stock has advanced past resistance at its 10-week moving average, according to MarketSurge analysis. Tesla had struggled to retake this level for much of 2024.
Tesla stock ranks eighth in the 35-member IBD Auto Manufacturers industry group. The stock has a 38 Composite Rating out of a best-possible 99. Tesla stock also has a 19 Relative Strength Rating and a 63 EPS Rating.
Meanwhile, Rivian stock sank more than 6% after reporting Q1 earnings and revenue late Tuesday.
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