Tesla shares moved higher in early Thursday trading, but remained mired in a weeks-long slump, as a top Wall Street analysts suggests the recent bearish moves belie what is still a compelling near-term story for the world's biggest EV maker.

Tesla stock is gaining ground following a recent report suggesting that the company could be on track to receive a $400 million contract through the U.S. State Department. However, subsequent developments are casting doubt on whether the deal will actually go through. The stock is also getting a boost from bullish analyst coverage.

If you're going anywhere near Tesla (TSLA) , watch out for the falling knife. The company has been hitting some rough patches as the electric vehicle maker looks to shift from auto-making to focus on self-driving technologies,