Elon Musk is a much-bigger-than-life kinda guy, but in his knock-down, drag-out battle with the SEC’s Goliath he is still just David. Last week he slung a rock at the giant’s face with a tweet implying Tesla would make half-a-million cars this year. What he’d meant to say was that current production was running at that pace. Although Musk tweeted a correction a few hours later, the regulators were already so incensed that they threatened action that could remove him as CEO.

Musk has been on a short leash, having agreed not to tweet anything before clearing it with his board. He didn’t, and that’s what has riled up his “probation officers” at the SEC. They’ve asked the court to punish him, but they had better be careful what they wish for. Although the SEC cannot appear to be doing nothing about Musk’s flouting the terms of his court agreement, neither can they afford to hobble Tesla so badly that shareholders suffer grievous losses. All of them undoubtedly are aware of TSLA’s extraordinary risks, and they would not have flinched at Musk’s recent, innocuous tweets. The SEC knows this, and so their eagerness to knee-cap Musk just to save face smacks of overkill.

Eliminating Dealers

Rogue tweets aside, the real news concerning Tesla is that it is seeking to bypass dealers by selling all of its cars online. The auto manufacturer will offer a seven-day return policy, and the sales process supposedly will take just minutes to complete. Will customers be willing to shell out $35,000 for a Model 3 without a test drive or the helpful guidance of a salesperson? Musk evidently thinks so, but in any event, eliminating the dealer network will allow Tesla to sell Model 3 for $35,000 as promised while still having a shot at making a decent profit.

The other big news last week was that the company shelled out $920 million to redeem a convertible bond issued five years ago. This is equal to a quarter of Tesla’s cash — a big hit that could squeeze the firm if cash demands should burgeon in the year ahead.

The Case for a 63% Rally

Through it all, the stock has fluctuated over the past ten months with violent swings from around $250 to $390. The long-term chart (see inset) suggests this is a consolidation for a move to higher levels. It implies that a 63% rally to $454 from a current $294 is possible (as is bankruptcy, of course). Whatever happens, the ability of TSLA to stay aloft with the regulators coming at the company so hard, and with Tesla itself making radical changes on-the-fly in the way it operates, has been a remarkable and highly entertaining spectacle. While the SEC may not be susceptible to a knockout punch, Musk, with a wicked jab and a cross that comes out of nowhere, could be the most formidable and determined foe the regulators have faced. _______ UPDATE (Mar 4, 10:51 .m.): Bulls are  struggling this morning to hold support at 288.13, the midpoint Hidden Pivot of a clear and compelling ABCD pattern. If it fails, the stock will likely fall to at least D=252.02._______ UPDATE (Mar 4, 6:14 p.m.): Sellers breached the support noted above, making a further fall to as low as 252.02 more likely. More immediately we can use the 270.07 secondary pivot (p2) shown in this chart as a minimum downside objective for the near term._______ UPDATE (Mar 5, 5:12 p.m.): TSLA trampolined $14 from within three cents of the 270.07 target I’d provided above. A subscriber reported getting long at the bottom and eventually exiting $12 higher, but because I require at least two such reports to establish a tracking position, I did not update my guidance. If and when the stock breaches 270.07 decisively, it should be presumed bound for exactly 252.02, the target noted above.