What To Watch On Tesla's Chart As The EV Leader Heads Into Q4 Earnings

Tesla, Inc TSLA was trading about 4% higher by mid-afternoon on Wednesday following a fairly muted initial reaction to the Federal Reserve releasing its January minutes, when it announced the decision to keep interest rates unchanged for the time being. Analysts expect the Fed to announce rate hike in March.

Tesla is scheduled to print its fourth-quarter earnings results after the closing bell on Wednesday. With record quarterly delivery numbers the electric vehicle producer reported on Jan. 2, many traders and investors are expecting Tesla to beat estimates.

The consensus estimate comes in at $2.26 per share on revenues of $16.35 billion for the quarter.

Traders and investors will also be paying attention to Tesla’s delivery outlook for 2022 amid ongoing supply constraints, as well as guidance on the company’s product roadmap.

Tesla has been trading in a fairly steep downtrend since Jan. 3 when the stock topped out near the $1,200 level. Between that date and Monday, Tesla plummeted almost 30% lower before bouncing up off a support level at $851.47, which indicates at least the temporary bottom may be in.

See Also: Tesla Is One Step Away From Blue-Chip Status, Faces 'High Expectations' Right Now

The Tesla Chart: On Monday, when Tesla bounced up from that level and closed the trading day up 2.79%, the stock printed a hammer candlestick on the daily chart, which indicated higher prices would come on Tuesday. On Tuesday, Tesla attempted to rally higher but rejected near the $950 area and closed the session slightly lower.

On Wednesday, Tesla was attempting to confirm the hammer candlestick and fly higher, but lack of volume looked to be holding the stock back from making a run-up into its earnings. By mid-afternoon, only about 19.36 million shares of Tesla had exchanged hands compared to the 10-day average of 29.09 million.

In order for Tesla to change the trend, the stock will have to eventually print a higher low above Monday’s low-of-day price. If the stock tops out and begins to fall lower before popping up over the most recent lower high at $1,072.38, Tesla will still be trading in a confirmed downtrend.

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• Bulls want to see big bullish volume come in on Wednesday to drive Tesla’s stock up over the eight-day exponential moving average and then for momentum to push the stock over the important $1,000 psychological level. Tesla has resistance at $978.60 and $1,045.02.
• Bears want to see big bearish volume come in and drop Tesla down below Monday’s low-of-day, which could put the stock in jeopardy of losing the 200-day simple moving average as support. Tesla has support below at $900.40 and $877.95.