Heading into Monday’s trading, shares of Tesla (stock symbol: TSLA) are down about 38% since the end of March. The
It’s down about 14% over that period. The
It decreased by about 20%.
Everything has gone wrong for Tesla (stock symbol: TSLA) investors in the past few weeks. The company’s most productive factory in Shanghai has closed and is now operating at reduced capacity due to the Covid-19 shutdown In China. Reuters reported on Monday that adding more staff to boost production has been delayed by a few days.
The delay may be the reason why Tesla stock fell in early trading on Monday. Hulu Documentary Produced by
The New York Times
About Tesla’s driver assistance features probably don’t help either. The documentary gives the impression that the Tesla system is not as secure as other systems. Incident from 2016 features prominently. Tesla’s system was cleared by the National Highway Traffic Safety Administration in that accident. Tesla, for its part, produces Quarterly Safety Reports It notes that Teslas are some of the safest vehicles on the road, and says its driver assistance features require driver supervision 100% of the time.
Tesla did not respond to a request for comment on the Shanghai production or the documentary.
Tesla stock was down 0.5% at 11 a.m. Monday, while the S&P 500 and
They gained 1.5% and 1.1% respectively to start the week.
Then there are the market sell-offs and the potential purchase of CEO Elon Musk
(TWTR), which was a distraction to investors and led to Musk selling a large block of Tesla stock to help fund his deal.
Inflation also hurts. Wells Fargo Analyst Colin Langanfor example, lowered
(F), lowered his price target on Tesla in mid-May, after concluding that the prices of battery materials, such as lithium, would rise for years to come.
All the bad news left Tesla stock trading about 28% below the 50-day moving average and 27% below the 200-day moving average. The 50-day moving average, at around $922 per share, is still above the 200-day average of around $913.
Moving averages crossover is one of the signs that traders look for. 50 under 200 is a bad sign. Another few days of trading like recent returns and investors will have to deal with that along with everything else.
said Katie Stockton, managing director of Fairlead Strategies Baron. Stockton holds a CMT, or Certified Market Technician designation.
The January low was around $792. Tesla stock closed lower in mid-May. “The breakdown gives the chart the appearance of a ‘double top’ formation, and our long-term metrics suggest that the downtrend may continue through the summer months,” Stockton adds.
The double top is basically the “M” mark in the stock chart. Tesla’s stock price reached $1,200 early in the year and about $1,150 in April. Then it started falling, which is a bearish signal for technical traders.
Stockton says the stock’s support appears to be in the $540 range. This represents a decrease of another 19%. Whether or not stocks exist depends on a number of things, including Shanghai production, earnings and, of course, everything the market does.
Fundamentals rule the day in the long run, but charts tell investors a lot about what is fundamentally going on – and what’s going on with investor sentiment.
Write to Al Root at [email protected]
“Hipster-friendly troublemaker. Communicator. Organizer. Devoted web lover. Unapologetic problem solver. Reader. Explorer. Travel guru.”