Tesla, Inc. (NASDAQ:TSLA) stock is plagued by uncertainty about its ability to turn a profit

Tesla, Inc. (NASDAQ:TSLA) stock is plagued by uncertainty about its ability to turn a profit

Tesla, Inc. (NASDAQ:TSLA) stock is plagued by uncertainty about its ability to turn a profit

Tesla (NASDAQ:TSLA) investors have endured a bumpy ride over the past few years as the stock rose and fell at the drop of a hat. On one hand, TSLA stock benefited from optimism regarding the public’s growing interest in electric vehicles and advancements in autonomous driving. However, the firm continuously disappointed by not living up to expectations, leading many to start doubting the validity of CEO Elon Musk’s sometimes outlandish claims. 

Now, in the wake of yet another disappointing earnings announcement, investors are buying the dip in hopes of picking up a groundbreaking company at bargain bin prices.

Tesla stock gained 3.39% on Monday as traders snapped up the beaten down stock, which fell 14% following its second quarter results. 

The Bottom Line on Tesla Stock

Tesla does have some potential growth catalysts on the horizon — the firm is about to complete a new Chinese factory and new Model Y vehicles are due out in 2020. Autonomous driving, once perfected, could add significantly to the value of Tesla vehicles that already have the functionality built in.

While all of that is worth considering, it doesn’t answer the underlying question plaguing Tesla stock — how is the company going to turn a profit? From what we have seen so far, the price point at which Tesla must sell its vehicles is too low to generate a profit. The departure of Tesla’s CFO Deepak Ahuja earlier this year followed by Straubel last week suggests that management knows the current strategy is flawed. This leads me to believe that there are quite a few more bumps in the road ahead before TSLA stock starts looking like a solid investment. 

Overall, the bias in prices is: Upwards.

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

By the way, prices are vulnerable to a correction towards 238.66.

The projected upper bound is: 265.08.

The projected lower bound is: 220.69.

The projected closing price is: 242.88.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
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 28 white candles and 22 black candles for a net of 6 white 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 29.9102. This is not an overbought or oversold reading. The last signal was a buy 0 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 52.39. 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 3 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 -50. This is not a topping or bottoming area. The last signal was a buy 1 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 3 period(s) ago.

Rex Takasugi – TD Profile

TESLA INC closed up 6.490 at 242.260. Volume was 24% below average (neutral) and Bollinger Bands were 4% narrower than normal.

Open     High      Low     Close     Volume___
232.900 243.360 232.180 242.260 8,109,014
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 248.22 222.13 281.37
Volatility: 94 62 64
Volume: 9,434,814 10,873,549 9,473,664

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 13.9% 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 0 periods.

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