After Tesla, Inc. (NASDAQ:TSLA) recent earnings report, many investors may be left with more questions than answers

After Tesla, Inc. (NASDAQ:TSLA) recent earnings report, many investors may be left with more questions than answers

After Tesla, Inc. (NASDAQ:TSLA) recent earnings report, many investors may be left with more questions than answers

When Tesla (NASDAQ:TSLA)  released worse-than-expected Q2 2019 earnings on July 24, many investors possibly ended up with more questions than answers on what to expect from Tesla stock for the rest of the year.

Before the earnings, TSLA  stock closed at $264.88. The next morning it opened at $234.50. Now Tesla stock price is hovering around $239. Can TSLA build up investors’ confidence enough in the coming months to push the stock over $300? Let’s take a detailed look.

TSLA’s Q2 Earnings

In Q2, Tesla’s total revenue came in at $6.35 billion, a year-over-year increase of 59% . However, the company missed analysts’ average top-line estimate of $$6.41 billion.

During the quarter, Tesla delivered 95,200 vehicles. The 134% YoY increase in vehicle deliveries was the main driver behind its revenue growth.

Despite the revenue increase, TSLA lost $408 million, or $2.31 per share. Even though Tesla did not lose as much money in Q2 as it did in Q1, it still lost more than analysts’ consensus estimate.

Finally, TSLA said it still expects to deliver between 360,000 and 400,000 vehicles in 2019. However, in the first half of the year, Tesla delivered just 158,375 vehicles. Can the company’s  deliveries in Q3 and Q4 combine to reach even the lower end of its guidance range?

In Q3 and Q4 of 2018, Tesla delivered 83,500 and 90,700 vehicles respectively. If the company’s performance in the rest of 2019 is similar, then TSLA will not even deliver 360,000 vehicles in the second half of 2019. In such a potentially disappointing scenario, how would TSLA stock price react?

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 238.57.

The projected upper bound is: 256.75.

The projected lower bound is: 212.10.

The projected closing price is: 234.43.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 54.9957. This is not an overbought or oversold reading. The last signal was a buy 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 46.96. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 5 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -63. This is not a topping or bottoming area. The last signal was a buy 3 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 5 period(s) ago.

Rex Takasugi – TD Profile

TESLA INC closed down -7.760 at 233.850. Volume was 23% below average (neutral) and Bollinger Bands were 10% narrower than normal.

Open     High      Low     Close     Volume___
242.650 244.510 231.770 233.850 8,259,516

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period     50-period     200-period
Close: 244.93 223.43 281.19
Volatility: 95 63 64
Volume: 9,725,666 10,451,702 9,484,007

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

TESLA INC is currently 16.8% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of TSLA.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on TSLA.O and have had this outlook for the last 2 periods.

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