LNG: TESLARATI

In a rather interesting episode of CNBC‘s Trading Nation, Oppenheimer technical analyst Ari Wald mentioned that Tesla stock (NASDAQ:TSLA) could be poised to see some recovery. Despite this, the analyst mentioned during his segment that he does not consider Tesla stock a “Buy.”

The Oppenheimer analyst argued that Tesla stock has been notably volatile to the point where its price direction is nearly aimless. In the past 12 months alone, Tesla shares swung from prices as high as $387 per share to as low as $244.59 per share. With $250 being a big support range level, Wald estimated that TSLA shares could swing back to $360 per share.

“This is one we’ve been on the sidelines with, avoiding both on the long end and short side, just given how directionless and choppy it’s been, and that’s still the case. It’s paid to buy it when it’s ugly and sell it when it starts to look good, so with that in mind, it probably looks more positive than not, just considering how bad it’s performed; $250 is the big support range level, $360 is the upside there,” the analyst said.

If Tesla does move back to the $360 per share level, it will represent a nearly 40% upside from Monday’s $260.42 close. Yet, despite the potential recovery, Wald stated that this does not mean TSLA is a “Buy.” “You can see the flat 200-day that exemplifies that directionless action. If we allocate toward stocks that trend, this isn’t one of them,” he noted.

Tesla stock has been weighed down recently partly due to concerns over the Model 3’s alleged “meager” demand and the ongoing issues between CEO Elon Musk and the Securities and Exchange Commission (SEC). On Monday alone, RBC analyst Joseph Spak slashed his price target on Tesla by $35 to $210 each. JMP Securities analyst Joseph Osha also trimmed his price target for Tesla by 3% to $394 per share. Both analysts cited reservations over the Model 3’s demand this first quarter as among the drivers behind their more conservative estimates.

Tesla, for its part, appears to be drawing the curtains back for some good news. On Monday, Tesla proved victorious after a judge dismissed a lawsuit claiming that the company committed fraud during the initial months of the Model 3 production ramp. A recent update from Morgan Stanley analyst Adam Jonas also confirmed that Tesla is not under a Wells notice and is not legally prevented from issuing stock, putting to rest a persistent point that has been brought against the company by its critics. The average price target in Wall St for Tesla stock also remains at $335 per share, implying a ~30% upside from Monday’s close.

This Tuesday, Tesla’s shares appear to be getting a breather, trading (+2.90%) at $267.84 per share as of writing.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

The skirmish between Elon Musk and the Securities and Exchange Commission (SEC) continued on Monday, with the agency calling on NY Judge Alison Nathan to make a decision on the case without holding a hearing for the Tesla CEO. The SEC’s latest request comes on the heels of Musk’s response last Friday, when his legal team noted that the agency’s position is “wrong at virtually every level.”

The SEC argued in its recent request to the NY judge that there is no ambiguity to the terms of the settlement it reached with Musk last year. The agency accused the CEO of muddling the matter at hand due to his “selective omission of certain settlement communications” in his team’s filings last Friday, where Musk defended his actions.

With these factors in mind, the SEC noted that Judge Nathan should be able to decide whether Musk violated the terms of his settlement or not without holding a hearing. “There are no material issues of disputed fact,” the SEC wrote. The SEC added that it was willing to provide more written information on its settlement negotiations with the Tesla CEO if Judge Nathan needs additional information.

It should be noted that the SEC’s recent request was filed after Musk’s legal team submitted a response last Friday. Musk’s lawyers did not hold back in their criticism of the SEC, stating that “The key question is whether Musk complied with Tesla’s Policy, not whether the SEC is satisfied with Tesla’s Policy.”

Musk’s team argued that the SEC laywers misinterpreted the deal he struck with them last September, stating that “the SEC’s reply makes clear that its effort to hold Musk in contempt relies on a radical reinterpretation of the Order that would impose sweeping restrictions to which Musk never consented.” The lawyers also noted that the information listed on Musk’s tweet, which estimated that Tesla would produce around 500,000 vehicles in 2019, was already public information following the CEO’s similar estimates in the first quarter earnings call.

“Musk’s belief that his tweet did not require pre-approval was correct. Every hallmark of immateriality is present: the tweet restated previously-disclosed information, used generalized terms, was aspirational and optimistic, and caused no reaction in after-hours trading,” Musk’s legal team wrote.

The SEC and Elon Musk’s latest row resulted from a tweet posted by the CEO on February 19, when he noted that Tesla made no cars in 2011, but will make “around 500K” this year. Musk later explained his tweet in a follow-up post, stating that the 500,000 estimate was true for the annualized run rate for Tesla’s 2019 production. The SEC seized on the opportunity, stating that the tweet was a violation of Musk’s settlement last September since it contained material information to the company and its shareholders.

In its request to hold Musk in contempt of court, the SEC pointed out that the February 19 tweet was not reviewed by corporate authorities. Musk, for his part, has argued that the SEC is “over-reaching” in its reactions against him, considering that the information he presented was a reiteration of public information, and it did not affect Tesla stock at all.