As Tesla Inc. (TSLA) prepares to unveil its third-quarter earnings after the market closes on Wednesday, investors are bracing for a pivotal moment. While analysts anticipate earnings per share of 58 cents on revenue of $25.37 billion, the real question for traders is whether Tesla’s stock, currently down 12.26% year to date, can finally shake off its persistent bearish spell.
Bearish Signals Dominate the Landscape
Tesla’s stock is currently trading at $217.97, and technical indicators paint a gloomy picture. The stock is trading below key exponential and simple moving averages, including the five-day, 20-day, and 50-day EMAs, clearly signaling a bearish trend. The 20-day SMA sits at $235.67, and the 50-day at $228.37, both significantly higher than the current price, further reinforcing this bearish sentiment.
The Moving Average Convergence/Divergence (MACD) also points to a negative outlook, sitting at a discouraging -4.80, suggesting that selling pressure remains strong. However, the Relative Strength Index (RSI) at 38.49 hints that the stock could be nearing oversold territory, which could signal an impending bounce. Adding to the bearish narrative, the Bollinger Bands show Tesla’s stock trading perilously close to its lower support, at $207.12, another worrisome indicator.
Glimmers of Hope for Tesla Bulls
Despite these bearish signals, a glimmer of hope remains for Tesla bulls. While the stock is experiencing significant selling pressure, the RSI dropping below 30 could potentially signal the emergence of buying pressure. If this occurs, investors might be looking for a potential reversal in the stock’s trajectory. Additionally, with the share price currently above the 200-day SMA of $201.29, the long-term sentiment for Tesla stock remains cautiously bullish.
What’s Weighing Down Tesla’s Stock?
Tesla’s recent stock woes can be partially attributed to concerns surrounding its global demand and pricing strategies. The recent price cuts have sparked fears of margin compression, raising concerns about the company’s profitability. Adding to these concerns, Elon Musk’s focus on ventures outside of Tesla, including X (formerly Twitter) and his campaign for former President Donald Trump, has led to increased investor caution as they head into earnings season.
Can Tesla Turn the Tide?
The question remains: Can Tesla surprise the market and stage a turnaround? Or will the earnings confirm the prevailing bearish trend? Investors will be watching closely to see if Tesla can address the concerns surrounding demand, pricing, and Elon Musk’s focus on ventures outside of the company. The earnings report could be a crucial turning point for Tesla’s stock, and investors will be looking for signs of a potential rebound or confirmation of the bearish trend.
