Tesla Stock News and Forecast: TSLA falls as Hindenburg Research shorts TWTR
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Subscribe to Premium- Tesla (TSLA) stock falls heavily, down 9% on Monday.
- Twitter (TWTR) stock is also lower as risk-off may hit the deal.
- Hindenburg Research says the deal price may be revised lower.
Tesla and Twitter stocks both took a hit on Monday in a panic-induced sell-off. Markets have remained extremely nervous with volatility rising and wild swings a noted feature last week. So far, it seems to be more of the same for this week, with bears in complete control of the narrative.
Macro factors are dominating markets with little for stock pickers to take comfort from. Over 90% of the stocks listed on the New York Stock Exchange (NYSE) fell on Monday in a broad collapse. Tesla was one of them, as we have mentioned before is a high-beta name, meaning it is more volatile. This continued on Monday with TSLA stock falling 9%, underperforming the Nasdaq and S&P 500 which fell 3% and 4% respectively.
Tesla (TSLA) stock news: Worsening prospects on TWTR deal
Tesla stock of course has been under more focus due to the potential takeover of Twitter by Elon Musk. We stated last week that we felt the deal was looking more and more unlikely in the current environment. To recap, financing will be harder to come by and private equity and hedge funds will start t aggressively curtail risk and credit. A large amount of Tesla shares have been pledged as collateral. Banks are on the hook for a significant amount and they too will pull back on risk and may insist on a yet larger slice of Tesla stock as collateral. They will also have noted the volatility in Tesla which will make them feel less confident in their collateral security.
Hindenburg Research added to our idea on Monday when they published a research note outlining why they felt the deal price was too high and it may be negotiated lower. Either way, it is hard to find a catalyst for either Tesla or Twitter in the current environment.
Added to this have been worries over the Chinese economy. Recent data has been poor and the country has faced widespread covid lockdowns. Oil markets fell sharply on Monday as those fears grew. China is the world's largest EV market and so of huge importance to Tesla. We also note this morning a Reuters report stating that Tesla's Giga-factory in Shanghai has halted production due to supply issues.
Tesla (TSLA) stock forecast: Holding up well despite bearish technicals
Despite these negative fundamentals, TSLA stock is still holding up relatively well. It has not come close to breaking the previous low at $700, set just after the Ukraine invasion. Since then the S&P 500 and Nasdaq have broken the low post-Ukraine invasion but Tesla remains well above it. Tesla closed at $787.11 on Monday.
$700 remains the target and key support for TSLA stock. If that is tested and holds then it may signal a double bottom. $945 remains the upside pivot, only by breaking below that, will Tesla have broken the current bearish trend. We still have declining RSI, MFI, and MACD. TSLA stock is trading below all major moving averages and all are downward sloping bar the 200-day.
Tesla (TSLA) stock chart, daily
The author is short Tesla and Twitter.
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- Tesla (TSLA) stock falls heavily, down 9% on Monday.
- Twitter (TWTR) stock is also lower as risk-off may hit the deal.
- Hindenburg Research says the deal price may be revised lower.
Tesla and Twitter stocks both took a hit on Monday in a panic-induced sell-off. Markets have remained extremely nervous with volatility rising and wild swings a noted feature last week. So far, it seems to be more of the same for this week, with bears in complete control of the narrative.
Macro factors are dominating markets with little for stock pickers to take comfort from. Over 90% of the stocks listed on the New York Stock Exchange (NYSE) fell on Monday in a broad collapse. Tesla was one of them, as we have mentioned before is a high-beta name, meaning it is more volatile. This continued on Monday with TSLA stock falling 9%, underperforming the Nasdaq and S&P 500 which fell 3% and 4% respectively.
Tesla (TSLA) stock news: Worsening prospects on TWTR deal
Tesla stock of course has been under more focus due to the potential takeover of Twitter by Elon Musk. We stated last week that we felt the deal was looking more and more unlikely in the current environment. To recap, financing will be harder to come by and private equity and hedge funds will start t aggressively curtail risk and credit. A large amount of Tesla shares have been pledged as collateral. Banks are on the hook for a significant amount and they too will pull back on risk and may insist on a yet larger slice of Tesla stock as collateral. They will also have noted the volatility in Tesla which will make them feel less confident in their collateral security.
Hindenburg Research added to our idea on Monday when they published a research note outlining why they felt the deal price was too high and it may be negotiated lower. Either way, it is hard to find a catalyst for either Tesla or Twitter in the current environment.
Added to this have been worries over the Chinese economy. Recent data has been poor and the country has faced widespread covid lockdowns. Oil markets fell sharply on Monday as those fears grew. China is the world's largest EV market and so of huge importance to Tesla. We also note this morning a Reuters report stating that Tesla's Giga-factory in Shanghai has halted production due to supply issues.
Tesla (TSLA) stock forecast: Holding up well despite bearish technicals
Despite these negative fundamentals, TSLA stock is still holding up relatively well. It has not come close to breaking the previous low at $700, set just after the Ukraine invasion. Since then the S&P 500 and Nasdaq have broken the low post-Ukraine invasion but Tesla remains well above it. Tesla closed at $787.11 on Monday.
$700 remains the target and key support for TSLA stock. If that is tested and holds then it may signal a double bottom. $945 remains the upside pivot, only by breaking below that, will Tesla have broken the current bearish trend. We still have declining RSI, MFI, and MACD. TSLA stock is trading below all major moving averages and all are downward sloping bar the 200-day.
Tesla (TSLA) stock chart, daily
The author is short Tesla and Twitter.
Like this article? Help us with some feedback by answering this survey:
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