Tesla, Inc. (NASDAQ:TSLA) waning demand threatens to shrink sales

Tesla, Inc. (NASDAQ:TSLA) waning demand threatens to shrink sales

Tesla, Inc. (NASDAQ:TSLA) waning demand threatens to shrink sales

Tesla investors are having a forgettable year as the stock has made them poorer by more than 30%. The Elon Musk-led company’s stock fell to two-year lows earlier this week.

But independent investment banking advisory firm Evercore ISI believes that the bloodbath isn’t done yet and has lowered its stock price target to $200 from $240. This represents a 13% drop from Tesla’s current stock price.

THE WHEELS ARE COMING OFF

Tesla’s stock has been hammered this year as investors and analysts have recognized that the electric vehicle maker faces an uphill task to grow sales thanks to a variety of challenges. According to Evercore ISI cited in CNBC:

“Our rev estimates decline -3%, -1%, and -6% in ’19, ’20, ’21 respectively, due to concerns around production, demand and macroeconomic conditions. With an enterprise value still of $53bn, Tesla still trades at a huge valuation premium to any automotive peers. This compares to other premium OEMs such as VW’s $36bn, BMW’s $15bn and DAI’s $27bn.”

Evercore’s thesis is that Tesla needs to deliver impressive growth in order to justify its lofty valuation. That can only happen if the company manages to execute its operating plan well, but that hasn’t been the case this year.

Tesla reported its biggest sales drop ever last month. Not surprisingly, the stock cratered. Its Q1 numbers were terrible amid logistics problems that hampered deliveries. Of course, Tesla is still promising that it will deliver 400,000 cars this year after moving just 63,000 vehicles in Q1.

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 278.33.

The projected upper bound is: 252.47.

The projected lower bound is: 209.65.

The projected closing price is: 231.06.

Candlesticks

A white body occurred (because prices closed higher 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 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 22.7853. 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 36.59. 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 12 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 -115.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 9 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 2 period(s) ago.

Rex Takasugi – TD Profile

TESLA INC closed down -0.360 at 231.950. Volume was 22% below average (neutral) and Bollinger Bands were 2% narrower than normal.

Open High Low Close Volume___
229.320 232.440 225.250 231.950 7,295,976

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 241.91 264.58 303.34
Volatility: 56 52 74
Volume: 10,811,081 10,091,877 9,593,676

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 23.5% below its 200-period moving average and is in an downward trend. Volatility is relatively normal 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 23 periods.

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