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.
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.
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
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