Zinger Key Points
- Tesla stock is down 12.26% YTD, trading below key moving averages.
- The MACD is negative signalling selling pressure, but a declining RSI hints at potential buying pressure emerging.
With Tesla Inc's TSLA third-quarter earnings slated to be out post-market on Wednesday, investors are bracing for a pivotal moment.
Analysts expect earnings per share of 58 cents on revenue of $25.37 billion, but the real question for traders is whether Tesla's stock — currently down 12.26% year to date — can shake off its bearish spell.
Bearish Trends Are Clear For Tesla, But What's Next?
Tesla stock is currently $217.97 as technical indicators flash red.
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The stock is trading below key exponential and simple moving averages, including the five-day, 20-day and 50-day EMAs, signaling a bearish trend.
The 20-day SMA sits at $235.67, and the 50-day at $228.37, both far above the current price, reinforcing the bearish sentiment.
Chart created using Benzinga Pro
The Moving Average Convergence/Divergence (MACD) also paints a grim picture, sitting at a negative 4.80, signaling the selling pressure is still strong.
Meanwhile, the Relative Strength Index (RSI) of 38.49 suggests the stock could soon be oversold, which could signal a bounce is near. And let's not forget the Bollinger Bands: with the lower band at $207.12, Tesla's stock is trading dangerously close to its lower support, another bearish signal.
What Could Turn The Tide?
Despite these bearish signals, there's a glimmer of hope for Tesla bulls. The stock is experiencing selling pressure currently, but the RSI declining below 30 could signal buying pressure emerging – at which point, investors could be eyeing a potential reversal.
Plus, with the share price above the 200-day SMA of $201.29, the long-term sentiment for Tesla stock remains bullish.
What's Weighing On Tesla Stock?
Tesla's recent stock woes can partly be attributed to concerns about its global demand and pricing strategies, with the latest price cuts sparking fears of margin compression.
Add to that the chatter around CEO Elon Musk‘s focus on non-Tesla ventures like X (formerly Twitter) and campaigning for Ex-President Donald Trump, it’s clear why investors are cautious heading into earnings.
Can Tesla surprise the market and stage a turnaround? Or will the earnings confirm the bearish trend?
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