Tesla Surges 2.12% as Legal Victory and Robotaxi Hype Ignite Market Optimism

Summary
• Delaware Supreme Court reinstates Elon Musk’s $56B pay package, ending a years-long legal battle.
• Social media buzz over unsupervised Model Y robotaxi tests in Austin fuels speculative buying.
• Goldman Sachs reiterates 'Neutral' rating on Tesla, citing regulatory risks in California.

Tesla (TSLA) surged 2.12% intraday, trading at $491.42 as of 15:01 ET, amid a confluence of legal clarity, product innovation, and sector-specific volatility. The stock’s 52-week high of $498.82 looms as a critical psychological barrier, with volume surging to 20.25 million shares traded. Analysts and traders are now parsing whether this rally reflects near-term optimism or a prelude to broader market rotation into AI-driven EVs.

Legal Victory and Robotaxi Momentum Drive Tesla Higher
Tesla’s intraday rally was catalyzed by two key developments: the Delaware Supreme Court’s reinstatement of Elon Musk’s 2018 pay package, which resolved a protracted legal dispute, and viral social media footage of unsupervised Model Y robotaxi tests in Austin. The court ruling removed a lingering overhang on governance risks, while the robotaxi progress—despite regulatory hurdles—rekindled speculative demand. Goldman Sachs’ neutral rating, though cautious, underscored minimal near-term operational risks, allowing bulls to capitalize on the narrative shift.

Automotive Sector Mixed as Toyota Trails Tesla’s Rally
The automotive sector showed divergent momentum, with Tesla outperforming peers. Toyota Motor (TM), the sector’s leader, gained a modest 0.11% intraday, reflecting its more conservative valuation and focus on traditional hybrids. Tesla’s rally, however, was driven by AI-driven innovation and regulatory optimism, highlighting a widening gap between EV pioneers and legacy automakers. This divergence underscores the sector’s bifurcation between tech-forward disruptors and cost-conscious incumbents.

Leveraged ETFs and Call Options Highlight Bullish Setup
• MACD: 13.67 (above signal line 9.28), RSI: 67.93 (neutral), Bollinger Bands: Upper $497.10, Middle $446.99, Lower $396.88
• 200-day MA: $351.10 (well below current price), 30-day MA: $436.68 (supportive)

Tesla’s technicals suggest a short-term bullish trend, with key resistance at $497.10 (Bollinger Upper) and support at $436.68 (30-day MA). The ProShares Ultra TSLA (TSLI) and GraniteShares 2x Long TSLA (TSLR) offer amplified exposure, with TSLI up 6.92% and TSLR up 4.62% intraday. For options, two contracts stand out:

• TSLA20251226C490 (Call, $490 strike, 12/26 expiry):
- IV: 41.52% (moderate), Leverage: 52.62%, Delta: 0.5033 (moderate), Theta: -2.92 (high time decay), Gamma: 0.0168 (high sensitivity)
- Turnover: $29.34M (liquid). This call offers a 25.76% price change potential with a 52.62% leverage ratio, ideal for a 5% upside scenario (target price $515.99).

• TSLA20251226C495 (Call, $495 strike, 12/26 expiry):
- IV: 41.12% (moderate), Leverage: 69.91%, Delta: 0.4196 (moderate), Theta: -2.57 (high time decay), Gamma: 0.0166 (high sensitivity)
- Turnover: $27.84M (liquid). This contract provides a 23.40% price change potential with a 69.91% leverage ratio, aligning with a 5% upside (target price $515.99).

Aggressive bulls may consider TSLA20251226C490 into a breakout above $497.10, while TSLA20251226C495 offers higher leverage for a sustained rally. Both contracts benefit from Tesla’s elevated gamma and moderate IV, making them responsive to near-term price swings.

Backtest Tesla Stock Performance
The backtest of Tesla (TSLA) following a 2% intraday increase from 2022 to the present shows poor performance. The strategy yielded a 13.45% return, lagging the benchmark by 29.52%. With a maximum drawdown of 0% and a Sharpe ratio of 0.05, the strategy had minimal risk but underperformed the market significantly.

Tesla’s Rally Hinges on 52-Week High Breakout and AI Narrative
Tesla’s 2.12% rally reflects a blend of legal clarity, product momentum, and speculative fervor, but sustainability depends on breaking above $498.82 (52-week high) and maintaining volume above 20 million shares. The stock’s dynamic PE of 415.23 and RSI near 68 suggest overbought conditions, but bullish momentum remains intact. Investors should monitor the ProShares Ultra TSLA (TSLI) and GraniteShares 2x Long TSLA (TSLR) for leveraged exposure, while options traders can capitalize on high-gamma contracts like TSLA20251226C490. Toyota Motor (TM), the sector leader, gained 0.11%, underscoring Tesla’s divergence from traditional automakers. Watch for $498.82 breakout or regulatory reaction.