News Analytics Align with Technicals' Slight Bearish Momentum ☄️
Updated
Dear Investors,
Chart Explanation
I believe if Tesla doesn't break out from the bearish triangle, it could downtrend to $225. This is the target price of multiple scenarios. The stock is volatile enough to fall to this price without additional confirmation. However, if the price meets the resistance trendline I marked with red, it can still spiral into the mentioned target zone. The chart shows how this resistance indeed rejected rallies many times over the previous months. I drew red arrows where I believe the resistance rejected the price. If the price breaks up this resistance, bullish scenarios will become more probable and Tesla will prepare for the moon. At the moment, however, the number of bearish scenarios suggests a better risk-reward ratio for shorts with losing the EMAs today. I've got a short myself from $251, and I'd consider increasing this position size if I see another rejection near the resistance. On the other hand, a breakup of the resistance would mean taking profits from these positions and preparing for a long setup. The $225 target aligns with multiple historical gaps that the stock is yet to fulfill. From that level, it can either break down or reverse up. There are possible targets on both sides. So, I think, it's important to monitor news and technicals alike. In this idea, I'd like to give you some news trading insights and how I see the technical indicators.
News Trading - Natural Language Processing
☄️ Tesla's production and delivery growth has slowed in recent quarters. The company's production growth slowed to 54% in the fourth quarter of 2022, from 119% in the third quarter. Deliveries also slowed to 936,000 in the fourth quarter, from 1.39 million in the third quarter. This slowdown could be a sign that Tesla is facing production bottlenecks or supply chain disruptions.
☄️ Tesla's gross margin has declined. The company's gross margin was 27.9% in the fourth quarter of 2022, down from 30.6% in the third quarter. This decline could be a sign that Tesla is facing higher costs or that it is discounting its cars more heavily to boost sales.
☄️ Tesla's stock price has been volatile in recent months. The stock price has fallen by more than 40% from its all-time high in November 2021. This volatility could be a sign that investors are uncertain about Tesla's future.
☄️ There are concerns about Tesla's ability to scale production efficiently. The company has ambitious plans to produce 20 million vehicles per year by 2030, but analysts have questioned whether Tesla can achieve this goal without facing significant production bottlenecks.
☄️ Tesla's competitive landscape is becoming more crowded. The electric vehicle market is becoming increasingly crowded, with new entrants from established automakers and startups alike. This could put pressure on Tesla's market share and pricing power.
Technical Indicators
MACD has been bearish since 29 November as the bottom indicator shows. The bearish momentum isn't too strong, but it's been consistent over the last week. On the RSI, above the MACD indicator, I can see a bullish RSI cross attempt, but this cross failed and became a bearish indication. The volume bars have been somewhat stable over this time, which might not enforce a strong bearish momentum, but it shows a lack of volume necessary for reversal.
Disclaimer
It's not an investment advice. Do your research. Your funds are your responsibility. This speculation serves only entertainment purposes.
Kind regards,
Ely
Chart Explanation
I believe if Tesla doesn't break out from the bearish triangle, it could downtrend to $225. This is the target price of multiple scenarios. The stock is volatile enough to fall to this price without additional confirmation. However, if the price meets the resistance trendline I marked with red, it can still spiral into the mentioned target zone. The chart shows how this resistance indeed rejected rallies many times over the previous months. I drew red arrows where I believe the resistance rejected the price. If the price breaks up this resistance, bullish scenarios will become more probable and Tesla will prepare for the moon. At the moment, however, the number of bearish scenarios suggests a better risk-reward ratio for shorts with losing the EMAs today. I've got a short myself from $251, and I'd consider increasing this position size if I see another rejection near the resistance. On the other hand, a breakup of the resistance would mean taking profits from these positions and preparing for a long setup. The $225 target aligns with multiple historical gaps that the stock is yet to fulfill. From that level, it can either break down or reverse up. There are possible targets on both sides. So, I think, it's important to monitor news and technicals alike. In this idea, I'd like to give you some news trading insights and how I see the technical indicators.
News Trading - Natural Language Processing
☄️ Tesla's production and delivery growth has slowed in recent quarters. The company's production growth slowed to 54% in the fourth quarter of 2022, from 119% in the third quarter. Deliveries also slowed to 936,000 in the fourth quarter, from 1.39 million in the third quarter. This slowdown could be a sign that Tesla is facing production bottlenecks or supply chain disruptions.
☄️ Tesla's gross margin has declined. The company's gross margin was 27.9% in the fourth quarter of 2022, down from 30.6% in the third quarter. This decline could be a sign that Tesla is facing higher costs or that it is discounting its cars more heavily to boost sales.
☄️ Tesla's stock price has been volatile in recent months. The stock price has fallen by more than 40% from its all-time high in November 2021. This volatility could be a sign that investors are uncertain about Tesla's future.
☄️ There are concerns about Tesla's ability to scale production efficiently. The company has ambitious plans to produce 20 million vehicles per year by 2030, but analysts have questioned whether Tesla can achieve this goal without facing significant production bottlenecks.
☄️ Tesla's competitive landscape is becoming more crowded. The electric vehicle market is becoming increasingly crowded, with new entrants from established automakers and startups alike. This could put pressure on Tesla's market share and pricing power.
Technical Indicators
MACD has been bearish since 29 November as the bottom indicator shows. The bearish momentum isn't too strong, but it's been consistent over the last week. On the RSI, above the MACD indicator, I can see a bullish RSI cross attempt, but this cross failed and became a bearish indication. The volume bars have been somewhat stable over this time, which might not enforce a strong bearish momentum, but it shows a lack of volume necessary for reversal.
Disclaimer
It's not an investment advice. Do your research. Your funds are your responsibility. This speculation serves only entertainment purposes.
Kind regards,
Ely
Note
Recent candles show bearish price action below the red resistance trendline as the red arrows signalled it.Note
TSLA is still under resistance, and the session will soon be over.Note
The channel's bottom trendline aligned with the bounce, but it's also a Fibo 0.5 (227.72). I didn't want to overburden the chart with lines, but I monitor Fibo levels. I was unconvinced of the further rally because the price's fighting Fibo 1 (240.27) now. The fight doesn't seem too bullish so far, but see where the price goes from here in today's session.Note
TSLA seems to follow the moon scenario, which is the upper white arrow on the chart. For a convincing trajectory, the price has to maintain its position above 250. You can see on the chart that it was the resistance trendline. TSLA seemingly broke this trendline, but historically, you can observe rejections even after the stock crossed a resistance line. Speaking in numbers, I've got a long with a target of $268 and a stop loss of around $243. I have opened this position only recently. So, hitting stop loss wouldn't hurt too much.Note
I didn't want to turn the chart into a chaos. So, I omitted some details you can see in my video, however. The position I described in the above update is the long position from the video.
Disclaimer
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