Stocks are on a heavy lift after the EV pioneer reported first-quarter earnings on the afternoon of April 26. Weakness is asking investors and traders where the bottom might be.
Tesla (ticker: TSLA) shares fell for the fifth trading day of the last six. Stocks rose on Friday after positive analysis
(STM.France) earnings. STMicro has increased its forecast for sales of the product, which is mainly bought by Tesla. But this positive tidbit was just a flash.
The stock fell 3.3% to $ 662.57 in Tuesday afternoon trading and fell about 10% from its April 26 close of more than $ 738 per share. IN
for comparison, over the same period, it declined by about 1%. IN
Dow Jones Industrial Average
What’s more, Tesla shares are now just below the 50-day moving average of about $ 684 per share. Technical traders use moving averages and other indicators to gauge investor sentiment and predict the direction in which stocks will move over short periods of time.
A close below the 50-day moving average could trigger the 200-day moving average. That’s below $ 600 a share, another 10% below recent levels, but the stock may find support before it hits that level.
This is because Tesla stock starts to look oversold when considering other technical metrics such as relative strength. Such technical indicators look at the amount and magnitude of the gains and losses for a stock or index. When a stock is oversold, for technical traders, it can mean that all the bad news is reflected in the stock price.
Based on these factors, traders can expect a rebound to around $ 710 if the stock reverses.
Technical factors usually mostly reflect what is happening with the stock. As for Tesla, investors weren’t thrilled with the recently posted earnings. Higher-than-expected regulatory credit sales and gains from bitcoin trading accounted for most of the reported earnings. Analysts had expected earnings per share to be 80 cents and Tesla’s adjusted earnings per share were 93 cents.
However, the gains made are not enough for Tesla stock, which has surged more than 300% in the past 12 months. Moreover, reports that production in Germany may be delayed are weighing on stocks this week. Tesla did not respond to a request for comment on the German facility it is building near Berlin.
Long-term investors should be prepared for Tesla stock to fluctuate for several weeks for several reasons. The company is still growing, making money and generating positive cash flow, but investors want to see solutions to some of its recent congestions, as well as new catalysts such as federal tax breaks or new production launches to lift the stock.
Of course, it doesn’t help that
decreased by 2.6%. Fears about inflation are back. Warren Buffett talked about rising inflation in
(BRKb), and the price paid for US producers reached almost 90 on Monday. A level of 50 indicates growth. The value 90 is off scale.
Email Al Ruth at [email protected]