Tesla ,TSLA, Get Free Report Stocks haven’t had an easy time this quarter and Monday was no exception, with shares of the electric-vehicle leader down 5% at last check.
The automaker just hasn’t been able to find its groove.
Disappointing quarterly distribution results and huge earnings have created a bearish mood for the quarter. Elon Musk’s acquisition of Twitter and concerns about the economy in China, a key market for Tesla, have it looming large for investors.
Shares slid Monday on reports the company was cutting production in China.
Tesla stock recently hit a 52-week low on Nov. 22, and after a rally, shares are under pressure again. Is a New Bottom in Store? Let’s look at the chart.
trading tesla stock
A few weeks ago, I mapped the $150 and $167.50 levels. As we focus on the latter – with a little help from hindsight – traders can see how important that level was.
Not only was this a key breakout level, but it is also where the 61.8% retracement comes in handy.
With today’s move lower, Tesla stock is trading below the 10-day and 21-day moving averages, as well as below all of its notable daily moving averages. If the stock breaks below $180, the chances that it will retest the $167.50 level increase greatly.
A break of the 2022 low opens the door for monthly VWAP measurements, along with the 50-month and 200-week moving averages. Beneath all these marks is the key $150 level, which was also a key breakout level.
On the upside, Tesla bulls need the stock to gain above the 10-day and 21-day moving averages.
If it can do that, last week’s high at $198.92 and $200 is in play. For what it’s worth, a 50% retracement of the current range under $202 comes into play.
In that case, a move above $202 – and thus all the levels listed above – opens the door to the $210 to $213 area.
Bottom-line? Be cautious with Tesla stock until we see lower prices or move above short-term moving averages.
Anything in between is a low risk/reward setup.