Tesla, Inc TSLA was plunging over 5% on Monday, in exaggeration to the S&P 500, which was sliding about 1%.
The market has been firing off mixed signals recently, with the S&P 500 attempting to regain the 200-day simple moving average as support. The broad market index has been held back by Tesla, Amazon.com, Inc AMZN and Apple, Inc AAPL, three of the top four companies in the S&P 500.
Although some areas of China have begun to lift strict COVID policies, Tesla is cutting back on the production of its Model Y at the Giga Shanghai factory. The EV giant is trimming its output of the SUV by 20% this month, according to a report.
In contrast, Tesla plans to step up the production of its Model Y at its Giga Texas facility in January. Tesla has also ramped up production levels at its Giga Berlin over recent months.
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The Tesla Chart: Although Tesla was sliding steeply on Monday, the stock hasn’t yet negated the uptrend that began on Nov. 22. The most recent higher high within the trend was printed on Dec. 1 at $198.92 and the most recent confirmed higher low was formed at the $178.75 mark on Nov. 29.
- Bullish traders want to see Tesla print a reversal candlestick, such as a doji or hammer candlestick, above $179 for the uptrend to remain intact. If Tesla is unable to hold above that level, a downtrend could be in the cards, which could take Tesla to a new 52-week low.
- If Tesla closes the trading day near its low-of-day price, the stock will print a bearish kicker candlestick, which could indicate lower prices will come again on Tuesday. If the stock is able to bounce up to form a significant lower wick, a hammer candlestick will form, which could indicate a bounce is in the cards.
- Bullish traders would like to see Tesla bounce up to regain the 21-day exponential moving average (EMA) as support. If that happens, the eight-day EMA will eventually cross above the 21-day, which could help to power the stock higher.
- Tesla has resistance above at $190.41 and $200.51 and support below at $177.59 and $166.71.
Photo: Courtesy of tesla.com
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