Tesla, Inc. (NASDAQ: TSLA) faces headwinds as disappointing Q4 earnings triggered an over 8.5% aftermarket slump, exacerbating a year-to-date decline of around 16.8%. Q4 revenues of $25.2B, while up 3% YoY, missed estimates by $0.6B, with non-GAAP EPS at $0.71, a $0.03 miss. Operating margin contraction to 8% reflected challenges in the Cybertruck’s production ramp and increased costs.
Tesla warned of notably lower volume growth in 2024 as it transitions to a new vehicle platform. Concerns over slower growth, margin pressures, and heightened competition, particularly from Chinese EV manufacturers, have weighed on investor sentiment. The company focuses on launching a next-generation vehicle at Gigafactory Texas, signalling a transition between growth waves.
Technical
Tesla’s 1-day chart reveals a current pre-market price of $190.80 pre-market on Thursday, trading over 8% lower after the disappointing Q4 earnings release after the bell on Wednesday. The price is below the downward-sloping 20-SMA (green line), 50-SMA (blue line), and 100-SMA (orange line) within a descending channel pattern, indicating strong bearish momentum. The RSI at 27.12 indicates oversold conditions, suggesting a potential for a short-term rebound.
With the price action looking to open lower following post-market trading yesterday, a continued decline could find support at the $176.11 support level below. A break above the $175.11 price level would bring the $152.37 support level firmly into play.
However, should the price find buyers on the market open, the 61.80% Fibonacci retracement level ($208.49) could test the upward trajectory’s resolution. A break below the golden ratio would leave the 50.00% Fibonacci retracement level ($225.83) and 38.20% Fibonacci retracement level ($243.17) as the next levels of significance in the short term.
Summary
Tesla’s stock faces a challenging landscape with disappointing earnings, lower growth expectations, and competitive pressures. Key levels to watch include support at $176.11 and potential resistance at $208.49. A sustained break below $176.11 could signal further downside, while a rebound above $208.49 may suggest a short-term recovery.
Sources: TradingView, Tesla, Inc., Seeking Alpha, Reuters, Dow Jones Newswire.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.
Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.
CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.
