Tesla Bears Grip EV Stock Following Weak Delivery Numbers: What's Going On?

Zinger Key Points
  • Tesla's fourth-quarter deliveries came in shy of analyst estimates.
  • The stock started to trade in a consistent downtrend on Nov. 1, making a series of lower highs and lower lows.

Tesla, Inc TSLA was plunging over 9% to start the 2023 trading year despite the S&P 500 trading flat.

The electric vehicle giant reported fourth-quarter delivery numbers Monday that came in below estimates, which worried some investors that demand for the company’s vehicles could be weakening globally.

Tesla delivered 405,278 vehicles, missing the Street’s 418,000 estimate. The company’s full-year deliveries were up 40% from 2021.

Tesla suffered a difficult 2022, as did many growth stocks, losing about 70% of its value. Some Tesla investors turned negative on the company after its CEO Elon Musk appeared to focus his attention on Twitter, which he acquired in October, and China’s zero-COVID policy throughout much of 2022 hampered production and demand in the Asian country.

From a technical standpoint, Tesla looked set to trade lower Tuesday after a three-day rally to end 2022 caused the stock to print a lower high.

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The Tesla Chart: Tesla started trading in its most recent downtrend on Nov. 1, 2022 and has made a consistent series of lower highs and lower lows. The stock’s most recent lower high was printed on Dec. 30 at $124.48 and the most recent lower low was formed at the $108.24 mark on Dec. 28.

  • If Tesla continues to trend lower over the next few days, bullish traders will want to see the stock wick up from the $108 mark, which could cause Tesla to print a triple bottom pattern at that level.
  • Bearish traders want to see Tesla decline under that area, which would suggest the downtrend is still intact.
  • If Tesla closes Tuesday’s trading session near its low-of-day, the stock will print a bearish kicker candlestick, which could indicate lower prices will come on Wednesday. If buyers come in and cause Tesla to form a lower wick, Tesla will print a hammer candlestick, which could indicate a bounce is in the cards, which could negate the downtrend.
  • Tesla has resistance above at $123.80 and $134.70 and support below at $110.07 and at the psychologically important $100 mark.

Photo via Shutterstock.

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