Tesla Stock News and Forecast: TSLA gets China sales boost

Tesla stock is set to open lower on Tuesday as equities remain challenged.
TSLA sees strong China sales data, but Morgan Stanley sees headwinds.
US yield surge continues to pressure growth stocks.

Ivan Brian FXStreet

Tesla (TSLA) looks set to open lower on Tuesday as conflicting stories circulate regarding the stock. The sideshow continues to be whether CEO Elon Musk's acquisition of Twitter (TWTR) also continues to weigh on Tesla as investors speculate as to whether or not he will have to sell more shares to facilitate the purchase.

Tesla stock news

Reuters reported on Sunday that Tesla set a monthly record for China-made EVs in September. Tesla delivered 83,135 China-made EVs, according to data from the China Passenger Car Association (CPCA). This is an increase of 7% and a record for the factory in Shanghai. This is some welcome news as the market has been focused on the negative tilt to last week's delivery numbers of 343,830. That number was short of analysts' forecasts, and the stock reacted negatively as a result. However, again the Reuters report puts perhaps another cloud on the horizon, saying Tesla plans to keep production at the giga factory in Shanghai at about 93% by the end of the year. In light of the latest delivery numbers last week, Morgan Stanley cut its base case price target for Tesla from $383 to $350. Morgan Stanley said it was likely Tesla was seeing demand destruction.

Tesla stock forecast

Tesla accelerated when it broke support at $266.15. It gapped below the next big level at $254, and this remained the key pivot. Remaining below makes it more likely we see more losses. The year's low so far at $207 is now drawing investor interest. Already Tesla is again down in Tuesday's premarket.

On a broader scale, we see conditions ripe for a countertrend bear market rally, but the lure to break $207 may prove too tempting. A washout toward $200 could then provide the catalyst for a bounce. Macro remains the dominant factor with bond yields approaching 4% for the US 10-year and Thursday's CPI being the key data release.

Tesla (TSLA) stock chart, daily

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Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

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