- Tesla stock finally catches a bid on Wednesday.
- Thursday sees the stock fall again and fails to retake the 9-day MA.
- Taper talk not helping as markets stumble.
Update: TEsla stock is down again on tHursday as the market digests the Fed taper talk. Is this a but the dip or the start of soemthing more bearish. Only time will tell but the broad market is selling off again today making it difficult for individual stocks to get any positive momentum going. Tesla has failed to break above the short erm moving averages and is stuck in a neutral zone.
Tesla finally caught some good news on Wednesday with the stock rallying 3.5% to close at $688.99. The stock was due for a bounce having suffered a fairly steep fall this week on the back of some bad news for the stock itself and the sector. Firstly, it was news from China that greater regulation for autonomous driving systems may be looked at, and then Tesla itself got caught up in the bad news when the US National Highway Traffic Safety Administration (NHTSA) announced it is reviewing Tesla's systems for identifying parked emergency vehicles. Reuters reported that the NHTSA has identified 11 crashes in the past 30 monhts in which Tesla models "have encountered first responder scenes and subsequently struck one or more vehicles involved with those scenes." The situation grew worse when two US senators asked the Federal Trade Commission (FTC) to investigate Tesla.
The results of both headwinds was Tesla breaking below the psychological $700 level and heading swiftly lower. Tesla stock eventually found some support at the 200-day moving average, and this is a well-worn path for Tesla investors as can be seen from the chart below. We also made a nice call for our readers before the market opened on Wednesday "We would in our humble opinion be trying dips at $665 with a stop somewhere around $650."
Tesla key statistics
| Market Cap | $682 billion |
| Price/Earnings | 373 |
| Price/Sales | 25 |
| Price/Book | 29 |
| Enterprise Value | $753 billion |
| Gross Margin | 22% |
| Net Margin |
6% |
| 52-week high | $900.40 |
| 52-week low | $287 |
| Average Wall Street Rating and Price Target | Hold, $711 |
Tesla stock forecast
The bounce on Wednesday has got Tesla back to the area of highest volume this year and the point of control at $682. This is basically an equilibrium, so getting some direction will require a serious kicker. Global equity markets look a bit fragile after the Fed minutes on Wednesday, meaning that momentum may be difficult to maintain. Those who did buy the dip and are long from our call, please use a trailing stop to ensure you can ride the trend and book some profits in the event of a pullback.
The key levels remain the same. $740 is the big resistance for bulls to win as volume dries out above, and a move to $780 should then be swift. Holding the $650 region is key as a break should see a move to $620 and then $600. Tesla needs to get back above $700 to get going again. At current levels there is nothing too enticing to initiate a fresh position just yet. Manage the ones you have, but in our view nothing is strong enough yet to warrant a fresh position.
The Moving Average Convergence Divergence (MACD) indicator has just crossed into a bearish signal, but the other momentum indicators are not flagging anything.
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