China Concerns, Consumer Reports And Leaked Email Take Tesla Shares On Wild Ride

After initially dropping more 6 percent in Thursday's pre-market session, Tesla Inc TSLA shares rallied as much as $20 off their morning lows following reports of a leaked email by CEO Elon Musk to Tesla employees claiming the company is on track for record deliveries in the second quarter.

The latest news comes as more analysts have lowered expectations for the battered electric vehicle maker. Even Tesla bulls are cutting estimates, but the stock may finally be approaching a long-term technical support level.

Record Deliveries

Teslarati reported Thursday morning on an email that was circulating online allegedly sent by Musk to Tesla employees on Wednesday that hinted at a record quarter ahead for the company. According to the email, Tesla is producing 900 Model 3s per day, or 6,300 vehicles per week.

“As of yesterday, we had over 50,000 net new orders for this quarter. Based on current trends, we have a good chance of exceeding the record 90,700 deliveries of Q4 last year and making this the highest deliveries/sales quarter in Tesla history!” the email reportedly reads.

The 50,000 net new order number is particularly bullish for investors given most of the concerns over Tesla from Wall Street analysts so far in 2019 have been related to demand rather than production.

Trade War Troubles

On Wednesday afternoon, Tesla bull and Loup Ventures founder Gene Munster cut his 2019 vehicle delivery estimates by about 10 percent from 340,000 to 310,000. Munster also lowered his 2019 China vehicle delivery estimate from 70,000 to just 40,000.

Munster said the impact of vehicle tariffs on Tesla’s China business and a potential boycott of Tesla by Chinese consumers are two major unknowns in the near-term.

Munster said Tesla’s recent $2.7 billion capital raise will provide the company with roughly a two-year cushion as long as Tesla delivers at least 300,000 vehicles in both 2019 and 2020.

Related Link: Analyst: Tesla 'Could Set Up For A Short Squeeze'

Consumer Reports Bashes Autopilot

Tesla investors got some more bad news on Wednesday when Consumer Reports ripped Tesla’s Autopilot in a new review. Tesla recently added lane-changing capabilities for Autopilot, but Consumer Reports said the technology is “far less competent than a human driver.”

After performing its own tests on the updated autopilot, Consumer Reports said human drivers have to constantly monitor Autopilot and be ready to override it manually to prevent the system from “making poor decisions.”

Jake Fisher, Consumer Reports’ senior director of auto testing said Musk’s promises that Tesla will have full self-driving technology ready to deploy by the end of next year look appear overly optimistic.

Technical Support?

Tesla’s 2019 has been horrendous up to this point, but Blue Line Futures President Bill Baruch told CNBC on Thursday that Tesla shares may finally find some technical support in the coming days.

Baruch said Tesla’s long-term support line dating all the way back to 2014 suggests $180 may be the near-term bottom for the stock. He also said the stock’s relative strength index is in extreme oversold territory, suggesting a bounce could be imminent.

Following Tesla’s big sell-off this week, the stock is down 5 percent overall in the past five years versus a 50.9 percent gain by the S&P 500.

Tesla's stock traded around $188.25 per share at time of publication, down 2.3 percent for the day. The stock is down 40 percent year to date.