Friday, December 2, 2016

"Tesla's Shares Are On A Slippery Slope" (TSLA)

The stock is at $180.32 down $1.56 (-0.86%) after trading down to $180.00.

From Forbes:
In the space of two months early this year Tesla’s shares almost doubled from $141.05 on February 9th to $269.34 on April 7th. However from a technical perspective they did not trade higher than the September 2014 intra-day high of $291.42 or July 2015’s $286.65. As can be seen in the chart below this was the start of an eight month downward movement of lower highs and lower lows.

I believe the combination of Tesla buying SolarCity and overall news flow turning negative on the company has led to the steady march downwards. The company’s stock dropped from $219.61 on June 21, the day the proposed merger was announced, to $196.66 the next day. It rallied until early August when it hit $236.63 but as can be seen in the chart that has formed a downward trend line from its early April peak.

Additionally recent news items such as the SEC saying that Tesla used “tailored accounting” in its August earnings release to Consumer Reports writing that the company was “showboating” and that “One of the things that frustrates us about the Model X is that Tesla went for needless flash over function.” are definitely not helping the shares.  Also having groups asking Telsa to stop using Autopilot in its marketing (I agree that it is not Autopilot) is another negative story.

It would not surprise me to see Elon Musk leverage the faith investors have in him or the company go on the positive spin offensive. Just yesterday Tesla sent invites to some investors for a January 4 tour of the Gigafactory and Musk makes off the cuff (but I’m sure planned) remarks such as another major announcement for the Model 3 will be in three or four months (said at the shareholder meeting on the SolarCity merger).

Stock needs to hold the $177 level
Excluding the stock market downdraft in early 2016 there is a key technical level at $177 (reached on May 9, 2014) and to a degree $181.40 (low on March 27, 2015) that the stock needs to stay above. If the shares start to trade below these prices and don’t stage a rebound the next support level is in the high $130’s to low $140’s....MORE
A Short-Seller Talks Tesla (TSLA)