Tesla Stock News and Forecast: TSLA shares lose 2% following software recall, fall under March '21 low
- Tesla issues new software recall for taillight glitch.
- The software update affects 321,628 vehicles.
- TSLA stock drops below March 2021 low of $179.83.
Tesla (TSLA) stock is down 2.2% in Monday's premarket after announcing another recall. This one affects 321,628 Model Y and Model 3 vehicles with model years between 2020 and 2023 that have issues with taillights failing to illuminate. The issue is not a physical recall where Teslas are brought back to mechanics to be fixed but rather involves software-based updates.
Tesla stock news
This is actually the 19th recall for Tesla in 2022, but the vast majority of them have been simple "over-the-air" software updates. The recall, carried out on November 19, was also the fourth of the month. Still, it is not a good headline when Tesla stock has fallen 55% year to date and nearly 19% in the past month.
Much of the recent head-hanging by Tesla investors is due to CEO Elon Musk very publically taking over day-to-day leadership at Twitter. The vast majority of Musk's tweets on the social media platform and many of his photos have been updates about Twitter's new corporate strategy. This has left the market feeling as if Tesla is running on autopilot not long after the EV maker has seen demand drop in China and missed delivery forecasts.
According to data from the National Highway Traffic Safety Administration, about 23 million vehicles have been recalled in the United States so far in 2022. Close to 4 million of those have been Teslas.
Tesla stock forecast
The drop in the share price has sent Tesla stock below the March 2021 low at $179.83. This $180 support level was key and held up on several occasions in 2020.
Moving below $180 bodes poorly for Tesla bulls at the moment, because it means the next area of support is down at $167.50. That price level served as both support and resistance in November 2020 and as strictly resistance in August 2020. Below there sits the $154 resistance level from the autumn of 2020.
The weekly Moving Average Convergence Divergence (MACD) indicator also seems in freefall and does not appear close to a bullish crossover. Without a bullish catalyst appearing in the headlines this week, expect Tesla stock to drop to one of the support levels mentioned, both of which are better entry points than the current price near $175.
TSLA 1-day stock chart
Premium
You have reached your limit of 3 free articles for this month.
Start your subscription and get access to all our original articles.
Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
