Tesla, Inc. (NASDAQ:TSLA) cut the starting price of the Model 3 sedan in the U.S. weeks after a federal tax credit shrank in half

Tesla, Inc. (NASDAQ:TSLA) cut the starting price of the Model 3 sedan in the U.S. weeks after a federal tax credit shrank in half

Tesla, Inc. (NASDAQ:TSLA) cut the starting price of the Model 3 sedan in the U.S. weeks after a federal tax credit shrank in half

Tesla Inc. cut the starting price of the Model 3 sedan in the U.S. weeks after a federal tax credit shrank in half, renewing concern over whether the electric-car maker can sustain sales with less support from incentives.

The Model 3 now starts at $38,990, according to Tesla’s website. Arndt Ellinghorst, an analyst at Evercore ISI, wrote in a report Tuesday that the halving of the U.S. tax credit to $1,875 at the beginning of July is causing the company to reduce prices to support demand.

“The key question remains — will Tesla be able to sustain itself given steadily declining ASPs and worsening mix?” Ellinghorst wrote, referring to the average selling prices of the company’s vehicles dropping as the Model 3 becomes a greater share of deliveries.

Tesla shares fell as much as 2.2% to $247.93 shortly after the start of regular trading Tuesday. The stock was down 24% this year through Monday’s close.

While the starting price of the Model 3 has dropped, Tesla’s moves to simplify its lineup include dropping a standard-range version of its larger and more expensive Model S sedan. The cheapest version available is now $79,990, according to the company’s website.

Tesla also cut prices on all vehicles shipped to China, with the Model 3 dropping to 355,900 yuan ($51,764) from 377,000 yuan, according to a Tesla representative. Prices of the Model S and Model X were cut about 4% to 776,900 yuan and 790,900 yuan, respectively.

The changes won’t affect prices of Model 3s that will be produced near Shanghai, according to the representative. Tesla is expecting to begin output at a factory there later this year.

Tesla is adjusting prices “in order to continue to improve affordability for customers,” the Chinese unit said in a statement. “We are standardizing our global vehicle lineup and streamlining the number of trim packages offered for Model S, Model X and Model 3.”

Overall, the bias in prices is: Upwards.

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

The projected upper bound is: 270.63.

The projected lower bound is: 234.03.

The projected closing price is: 252.33.

Candlesticks

A white body occurred (because prices closed higher than they opened).
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 25 white candles and 25 black candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 95.0992. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 23 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 70.86. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 29 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 146.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 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 buy 28 period(s) ago.

Rex Takasugi – TD Profile

TESLA INC closed down -1.120 at 252.380. Volume was 24% below average (neutral) and Bollinger Bands were 20% narrower than normal.

Open High Low Close Volume___
249.300 253.530 247.932 252.380 8,148,989

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period     50-period     200-period
Close: 238.14 219.67 282.92
Volatility: 41 54 69
Volume: 8,760,706 10,816,879 9,750,834

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 10.8% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of TSLA.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on TSLA.O and have had this outlook for the last 22 periods. Our momentum oscillator is currently indicating that TSLA.O is currently in an overbought condition.

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