Tesla, Inc. (NASDAQ:TSLA) Doubts Increase Over Tesla’s Growth Projections
If you’re not following Tesla’s story as closely as we do, you might wonder what difference a miss of one quarter could make in the life of a car-maker with a promising product that’s still in the early stage of its growth cycle. Why the drastic reaction from the market? The answer is that it confirms investors’ worst fears about the credibility of Tesla’s latest growth projections. If those growth assumptions were based on a too optimistic scenario, then investors have little reason to cling to Tesla stock, which has suffered many setbacks during the past one year.
The biggest was Musk’s botched attempt to take Tesla private which triggered a regulatory probe, resulting in a $40-million fine and Musk’s being barred from the company’s chairmanship. The U.S Securities and Exchange Commission (SEC) has taken Musk to the court after his Feb. 19 tweet over Tesla’s car production numbers that the regulator claims was misleading and violated his earlier settlement terms. In an order on Friday, a Manhattan court judge gave both sides until April 18 to reach a resolution. If they do not, the judge said she would decide whether to hold Musk in contempt.
Tesla’s bulls can still find some solace in this dismal situation though. The company, in its first-quarter output statement, confirmed its earlier projections of 360,000-400,000 vehicle deliveries in 2019, due to strong demand from Europe and China. In North America the Model 3 was yet again the best-selling mid-sized premium sedan, selling 60% more units than the runner up, according to Tesla statement.
We, however, find it quite difficult to be positive on Tesla’s shares and so do many leading Wall Street analysts. According to Shayne ‘Jack’ Heffernan, CEO and Founder of Heffx Trading, the slowdown in Model S and X deliveries will negatively impact Tesla’s first-quarter earnings and could potentially shave more than $1 billion off Tesla’s revenue estimates.
For us, the biggest concern is about Tesla’s management of its cash flows at a time when demand for its cars is falling and it needs to arrange money for maturing debt. Tesla had about $3.7 billion of cash and equivalents by the end of last quarter, but had to pay off a $920 million convertible bond in February. The carmaker has a $566 million note coming due in November, according to Bloomberg data.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 296.67.
The projected lower bound is: 248.77.
The projected closing price is: 272.72.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
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 32.0124. This is not an overbought or oversold reading. The last signal was a sell 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 45.15. 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 144 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 2. This is not a topping or bottoming area. The last signal was a sell 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 buy 7 period(s) ago.
Rex Takasugi – TD Profile
TESLA INC closed down -1.760 at 273.200. Volume was 25% above average (neutral) and Bollinger Bands were 37% narrower than normal.
Open High Low Close Volume___
277.690 281.160 270.440 273.200 10,410,436
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 278.39 291.44 312.27
Volatility: 64 52 74
Volume: 9,758,421 8,917,944 9,270,791
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 12.5% below its 200-period moving average and is in an upward trend. Volatility is 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 1 periods.