Tesla Stock News and Forecast: TSLA holds key support at $207 as Elon Musk remains upbeat

Tesla stock fell after earnings on Wednesday evening.
Tesla briefly broke below key support at $207.
Slight recovery on the close helped to finish at $207.28.

Ivan Brian FXStreet

Tesla (TSLA) as expected traded lower on Thursday following the release of its earnings after the close on Wednesday. The stock had traded down over 5% in the after hours and lost another percent in the regular session to finish down 6.65 on Thursday.

Tesla stock news

Earnings came out after the close on Wednesday and showed a miss on the revenue line, while earnings per share did come in ahead of forecasts. Analysts remained relatively upbeat, but the market took a more skeptical view. Elon Musk was quite bullish on the conference call, saying he saw a path for TSLA to be worth more than Apple and Saudi Aramco combined.

Macroeconomic factors may be hindering such optimism. Continued concern over Chinese demand is weighing on the stock as is the ability to maintain such high margins in the face of mounting inflationary pressures. Tesla has some of the highest margins in the auto industry, possibly the highest, and this is one of the factors bulls point toward to justify its lofty valuation. With yields continuing to rise, stocks at the frothy end of valuations are being sold off more aggressively, and Tesla has been pressured as a result. Concerns over supply chain issues about semiconductors have again popped up to provide further headwinds for Tesla.

Now adding to the mix are reports that the US government is to consider a review of Musk's deals. Musk is key to the marketing and branding of Tesla, so this is a further unnecessary headwind.

Scoop: Biden admin officials are discussing whether US should subject some of @elonmusk’s ventures to national security reviews, including his deal for Twitter Inc., and the Starlink satellite network, sources tell @SalehaMohsin and me. @BloombergTV pic.twitter.com/pZx1As8RUZ
— Jennifer Jacobs (@JenniferJJacobs) October 21, 2022

Tesla stock forecast

We have mentioned the key $207 level as the support to watch, and after a brief dip below Tesla recovered to close above this level. Things are looking increasingly shaky here though. The more a level is tested, the weaker it becomes. In my view, a confirmed break (i.e. close below) opens up the door to a significant move toward $160. This is the next support, at the lower trend line, and 200-week moving average. If $207 can hold, then the logical target is to close the gap to $266. This is from the open after delivery numbers came out on the first weekend of October.

Tesla (TSLA) chart daily

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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