Pre-Earnings Move Lower In Tesla

Tesla Motors Inc TSLA shares are trading lower by $3 at $237.76 in Monday's session. The company will report Q1 earnings after the bell on Wednesday. The Street estimates for EPS are $(0.57) on revenues of $1.6 billion.

Many stocks will make a pre-earnings move a few days ahead of the report.

The reason being, investors that are already in the issue (long or short) may attempt to take profits or limit losses ahead of the next catalyst for the stock to be announced. Since the volatility of the issue will be heightened the day following the news, many investors (large and small) will trim their lot in the issue the day before the report.

Related Link: Analyst: Tesla Model 3 Won't Be 'A Game-Changer' In China

In the case of Tesla, it had a monster run from its February 9 low ($141.05) to its April 7 high ($268.34). It should be noted the low was made one day before its Q4 report, which came up well shy of Wall Street estimates. That didn't seem to matter as the issue caught a bid and didn't end until a week after the company made the announcement that Model 3 pre-orders exceeded expectations.

Since making that elevated level, the issue has succumbed to some profit-taking of its nearly $130 rally. In today's session, it has reached its lowest level since its $268.34 print, so far reaching $235 and attempting to rebound.