Tesla Chart Shows A Pivotal Moment For Stock Following Bearish Earnings, Price Target Cut

Zinger Key Points
  • Tesla is trading in a confirmed downtrend, making a series of lower highs and lower lows.
  • The stock may find resistance at the lower trendline of a triangle on the next bounce.

Tesla, Inc TSLA slid over 7% under Friday’s closing price on Monday before rising up to close the day near flat.

In the premarket on Tuesday, the stock was trading down slightly after Morgan Stanley analyst Adam Jonas maintained an Overweight rating on Tesla and lowered the price target from $350 to $330.

Jonas believes increasing price competition in China could add pressure to the stock. Worsening U.S.-China relations could also prompt increased volatility in Tesla, according to the analyst.

Cathie Wood took advantage of the recent dip in Tesla to add shares to the ARK Autonomous Tech. & Robotics ETF ARKQ on Monday. The fund purchased an additional $2.28 million worth of Tesla stock, and now holds a position valued at about 89 million.

Although the overall trend in Tesla has been down since Sept. 21, the stock looks set for a bounce. The lower wicks that have printed on the last three daily candlesticks indicate there are buyers near the $200 mark.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The Tesla Chart: On Thursday, Tesla broke down bearishly from a bear flag pattern, which Benzinga said on Wednesday was likely to happen if the stock received a bearish reaction to its third-quarter earnings. The breakdown from the pattern came on larger-than-average volume, which indicates the pattern was recognized.

  • Solid support at $200 has stopped the stock from sliding further, and bullish traders will want to see that level hold over the coming days. If Tesla is able to pop back up into its long-term triangle pattern, it would give bulls more confidence going forward.
  • Bearish traders can watch for Tesla to reject the lower ascending trendline of the triangle as resistance if the stock bounces up to the area.
  • Tesla is trading in a confirmed downtrend, with the most recent higher low formed on Oct. 18 at $229.82 and the most recent lower low printed at the $198.59 mark on Monday. To negate the downtrend, Tesla will need to print either a higher low or a higher high.
  • Tesla has resistance above at $213.13 and $225.03 and support below at $200.51 and $190.41.
Market News and Data brought to you by Benzinga APIs
Posted In: Long IdeasShort IdeasTechnicalsTrading Ideas
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!