Tesla Inc (NASDAQ:TSLA) reported its latest batch of earnings Wednesday after the close of trading. Although the stock is still well higher for the year, it hasn’t done anything for bullish investors since June, and the souring mood among the impatient trading and investing crowd is palpable. Yet, therein might just lie the best opportunity.
So you know, Tesla in its latest quarter posted a worse than expected loss but did beat on the top line. Because much investor focus for now is around the company’s ability to ramp up production of its Model 3 car, investors weren’t terribly excited to hear that there are still bottlenecks in production of this vehicle.
Before looking at some charts, allow me to say a word around investor mood on Tesla stock.
In my thus-far 20-year career as a trader and investor I have never seen investor mood as polarized around any stock as it currently is in TSLA stock. From conversations with institutional and affluent investors all the way to public message boards, the degree of investor emotions I see both bullish and bearish on this stock is of epic proportions. This leads to a more volatile stock (which TSLA is) and also to more raging rallies and sell-offs.
TSLA Stock Charts
Moving averages legend: red – 200 week, blue – 100 week, yellow – 50 week
Looking at the multiyear weekly chart of TSLA stock, we see that after a multiyear sideways push the stock this past April finally broke out of this range to the upside. By June however the stock became overbought and has since largely been in a consolidation phase.
Although the stock did have a first corrective period in July to work off the immediate overbought readings, at this point it looks like the stock could do another classic re-test of former technical resistance around the $280-$290 area before finding better support.
Moving averages legend: red – 200 day, blue – 100 day, yellow – 50 day
On the daily chart, we see this former resistance area a little better (blue horizontal), which also lines up with a 50% retracement of the entire rally off the late 2016 lows up into the June 2017 highs.
In other words, if TSLA stock can retest this $280-$290 confluence support area then in my eye a better level to buy the stock from a tactical perspective presents itself. This, so you know, would also mean that TSLA stock has “corrected” about 30% off the June highs, which traditionally is a healthy percentage pullback for growth stocks.
Check out Anthony Mirhaydari’s Daily Market Outlook for Nov. 2.
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