Musk Shares Dim View on Economy 

Tesla shares are trading higher ahead of the open today on the back of the annual shareholder meeting yesterday. The event was an interesting one. CEO and founder Elon Musk was seen striking a tone of caution over the economic outlook and warned that Tesla would not be immune to hard times. Musk cited his expectation that discretionary consumer spending will continue to undergo downward pressure amidst a year of difficulty for the global economy, during which time many companies will suffer bankruptcy. Looking further out beyond the next 12 months, however, Musk signalled that a swift turnaround would be seen with long-term Tesla holders expected to do very well.

Tesla to Embrace Advertising - New Products Teased

Despite the warning, there were some more positive takeaways from the day. Musk announced that the company would make a move into the world of traditional advertising, which it had previously dismissed. Additionally, Musk teased that two new products were in the pipeline and would be unveiled soon at a launch event. No further details were given except to say that these products were "head and shoulders above anything else" in the market.

Near-Term Risks 

Tesla shares are currently down around 24% from the YTD highs though still up more than 60% on the year. With USD rallying currently, the near-term outlook is tricky for the stock. However, with the Fed widely expected to hold rates beyond June, if a debt ceiling resolution can be agreed this should help propel Tesla higher near-term.

Technical Views

Tesla

The breakdown in Tesla shares recently has seen the stock trading down to around the 170.22 level. Shares have been recovering recently and if bulls can hold atop this level, the focus is on a move back up to 207.71 in line with bullish momentum studies readings.