- Tesla stock continues to recover ground as it closes at $758.26 on Tuesday, more or less flat.
- TSLA had bottomed out at $620, which is a key support level.
- Elon Musk and the Twitter saga drag on.
Tesla (TSLA) stock stabilized further on Tuesday after closing Friday significantly higher. The stock has been recovering ground from some heavy losses taken in the face of multiple headwinds. Tesla held the key $620 support, and this coupled with a strong recovery from the broader market enabled a move above $700. Is it sustainable though?
Tesla stock news
The Twitter saga drags on, and this has been a key component of the lag in Tesla's stock price. Elon Musk has pledged quite a bit of Tesla stock as collateral for various needs over the years, and investors grew increasingly nervous that yet more may be pledged as collateral to get the Twitter deal over the line. This was headwind number one.
Second, the situation in Shanghai with covid associated lockdowns has spooked Tesla investors. Production was halted at Giga Shanghai, which is the highest margin manufacturing site for Tesla. Data from China showed a massive 98% drop in output for the last month. Tesla failed to export any vehicles from China in April. In order to maintain and justify its extremely high share price valuations, Tesla needs to continue with its impressive growth. This will hinder that.
We recently did a deep dive into Tesla using a discounted cash flow (DCF) analysis as well as a comparative EV/EBITDA valuation and P/E valuation. We started Tesla with a $400 price target. This was using tech-sector based multiples using the Nasdaq average P/E and Apple for comparison. See the full article here, and let us know what you think. We also published a deep dive on Apple with a $100 price target. Again we used DCF and P/E valuations but modeled for a 10% reduction in 2023 revenues. See the full article here.
Tesla stock forecast
A textbook bounce from our $620 support. Shares were not only flagged by support but by oversold conditions in both the Money Flow Index (MFI) and the Relative Strength Index (RSI). This rally could extend up to and above $800. We still feel this is a bear market rally, both in terms of Tesla and the broader market. Bear market rallies can be powerful though. Tesla remains in a downtrend with lower highs and lows. Note that we also just got the dreaded death cross signal. The 50-day moving average breaking below the 200-day. Never a good look for a stock.
Tesla (TSLA) chart, daily
Like this article? Help us with some feedback by answering this survey:
The author is short Tesla and Twitter.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds gains above 1.0700, as key US data loom
EUR/USD holds gains above 1.0700 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
GBP/USD extends recovery above 1.2500, awaits US GDP data
GBP/USD is catching a fresh bid wave, rising above 1.2500 in European trading on Thursday. The US Dollar resumes its corrective downside, as traders resort to repositioning ahead of the high-impact US advance GDP data for the first quarter.
Gold price edges higher amid weaker USD and softer risk tone, focus remains on US GDP
Gold price (XAU/USD) attracts some dip-buying in the vicinity of the $2,300 mark on Thursday and for now, seems to have snapped a three-day losing streak, though the upside potential seems limited.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.