Tesla, Inc. (NASDAQ:TSLA) Elon Musk is cutting prices on some of the company’s older model cars
Tesla’s stock is down another 6% today, the sixth consecutive session TSLA shares have fallen. It is now down 40% year-to-date.
Tesla’s stock is getting hammered today because of the company’s announcement that it is cutting prices on older model S and X vehicles. Merrill Lynch put out a note expressing concern that sales on those models have peaked and are losing market share to its own Model 3.
Analysts are starting to get a clue that Tesla’s stock has always been a sucker’s bet, with Morgan Stanley lowering its worst-case scenario price target to $10:
“Our revised bear case assumes Tesla misses our current Chinese volume forecast by roughly half to account for the highly volatile trade situation in the region, particularly around areas of technology, which we believe run a high and increasing risk of government/regulatory attention.”
Tesla’s stock had defied gravity for years even as problems with its cars mounted. From cars spontaneously bursting into flames to auto-driver crashes to production delays and shortages of parts, Tesla and Elon Musk managed to paper over all of these problems.
Yet things finally took a turn when Tesla’s cash burn caught up with it, forcing the company to draw down additional funding a few weeks ago after reporting a disastrous loss of $702 million in the first quarter. This loss came on the back of a 30% decline in quarterly deliveries of vehicles over the previous quarter.
Some of this decline is the result of the $7,500 tax credit being cut in half, once again proving that rent-seeking Elon Musk built his empire on the backs of government subsidies.
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 259.26.
The projected upper bound is: 213.20.
The projected lower bound is: 168.63.
The projected closing price is: 190.92.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black 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 18.0616. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 1 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 22.33. This is where it usually bottoms. 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 17 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 -147.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 14 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 down -12.350 at 192.730. Volume was 88% above average (neutral) and Bollinger Bands were 29% wider than normal.
Open High Low Close Volume___
199.100 203.940 191.780 192.730 18,685,188
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 221.53 257.21 300.62
Volatility: 57 56 72
Volume: 12,158,813 10,871,701 9,711,643
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 35.9% 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 28 periods. Our momentum oscillator is currently indicating that TSLA.O is currently in an oversold condition.