Tesla, Inc. (NASDAQ:TSLA) accelerating their Gigafactory 3 construction timeline
On Tuesday, Tesla (TSLA) released their third-quarter production numbers, and that is what most people have been focused on. However, one small detail seems to have evaded the scope of many people, a detail that may even be more important than delivery and production numbers. Tesla announced that they are ramping up the construction timeline of Gigafactory 3 in Shanghai. Originally, production at half capacity was supposed to begin only two years after ground was broken in Shanghai. Full capacity was expected to be reached after another two or three years after initial production began. In light of Tesla recently disclosing that they are facing a 40% tariff on cars sold in China, the company has now announced plans to shorten the previously mentioned timeline.
In light of Tesla recently disclosing that they were facing a 40% increase on cars that are sold in China, the urgency to complete their third Gigafactory in Shanghai has risen. Another factor that many people don’t seem to notice is that the Chinese government provides incentives for local manufacturers, giving 15% off MSRP for each EV. Tesla will be able to capitalize on this once Gigafactory 3 is complete, but now they are facing this additional price disadvantage. These raised prices have reserved Teslas as cars exclusively for the very wealthy. A factory that is producing cars in China will allow Tesla to completely bypass this tariff and qualify it for the reduced MSRP, resulting in the ability to bring their vehicles to a greater portion of the Chinese population. This will also increase their full production capabilities; Gigafactory 3 is predicted to produce 500,000 vehicles annually upon completion (as is the Fremont factory), resulting in their total production doubling.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 298.56.
The projected upper bound is: 299.64.
The projected lower bound is: 216.00.
The projected closing price is: 257.82.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 41.2860. 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 41.26. 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 buy 25 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 -60. This is not a topping or bottoming area. The last signal was a buy 2 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 7 period(s) ago.
Rex Takasugi – TD Profile
TESLA INC closed up 0.810 at 259.590. Volume was 41% below average (neutral) and Bollinger Bands were 9% wider than normal.
Open High Low Close Volume___
259.060 263.280 254.537 259.590 6,199,965
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 268.04 302.47 313.10
Volatility: 64 89 69
Volume: 10,741,486 11,112,544 8,644,206
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.
TESLA INC is currently 17.1% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 5 periods.