During his State of the Union address on Monday, January 25, 2021, US President Joe Biden announced the transition of the federal vehicle fleet to electric traction. The opportunity to enter new markets for electric vehicle manufacturers like Tesla Inc. (NASDAQ: TSLA) with multi-year contracts is exciting.
Biden announced that the federal government would replace combustion engines in its fleets of cars and trucks with electric vehicles. This follows the signing of an American Industry Support Initiative that spurs domestic manufacturing and job creation in the United States. The requirement for the share of American-made components will be even higher, as Joe Biden went on record saying that public organizations will have to buy cars with at least 50% parts manufactured in the United States.
However, no exact time frame or numbers have been announced yet. It could be decades. However, the US government is a large and resilient buyer of automobiles, and it has the potential to boost the industry’s growth. It’s not just Tesla Inc (TSLA) that benefits. The biggest automakers like General Motors are racing to develop electric vehicles, including pickup trucks and SUVs. Although electric traction cars are more expensive than gasoline and diesel ones, electric traction cars’ operating costs are lower, which may also provide an additional incentive for federal agencies to switch.
Market participants are looking again at Tesla Inc (TSLA) shares. Currently, this stock’s 14-day RSI is sitting at 71.39%, with a 9-day RSI of 72.49% and a 20-day RSI of 70.52%. Indicators such as the Relative Strength Index (RSI) are widely used by investors and traders alike. The RSI operates within a range with values ranging from 0 to 100. An increase in the RSI line indicates strength in the shares. RSI lines that start to fall give the opposite indication.
The RSI indicator is typically used on different timeframes. RSI may seem more volatile in shorter time frames, as it depends on the time frame used. Many traders keep their attention between the 30 and 70 marks on the RSI scale. It is believed that a shift above 70 indicates that the stock has surpassed the overbought line. A decrease below 30 could indicate the stock is being oversold. Traders often use these levels to predict the reversal of stock prices.
TSLA stock has gained 37.55% over the last month, 90.66% if we extend it to 3 months, and 6.61% over the last five days. Regarding how the stock’s price moves over the week and the month, we find volatility rates of 3.21% over the week and 3.90% over the month.