Tesla's Chart Is Grotesque
If history is any indication, Tesla Motors Inc (NASDAQ: TSLA) shareholders could be in for some major volatility this week after the company reports Q4 earnings on Wednesday. With the stock already down an incredible 36.9 percent so far in 2016, here’s a look at how Tesla’s chart sets up ahead of earnings from a technical perspective.
It’s hard to know where to start, but it’s not good. Tesla is trading below all of its major moving averages and has broken below all major short-term support levels.
The first bearish sign for Tesla came back in mid-2015 when the stock could not break above its previous all-time high of $291.42 and instead formed a bearish double top (in blue on the chart). Since then, Tesla broke down below support in the $175-185 level than had held since early 2014.
At this point, Tesla bulls are eyeing the late-2013 bounce at $116 as the next line of possible technical support and likely refusing to even think about where the stock could find support below that level.
Aside from a major earnings upside surprise, the best bet for a technical Tesla bounce in the near future is the fact that the stock’s RSI of 22.5 indicates that it is currently extremely oversold.
Tesla has been beaten up in 2016. What do you think is most important in today's Q4 earnings report? $TSLA
— Benzinga.com (@Benzinga) February 10, 2016
Disclosure: the author holds no position in the stocks mentioned.
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