- Tesla stock is under pressure again as more price cuts are announced.
- The lure of $100 just looks too close for comfort.
- Earnings season to cap equity market gains for now.
Tesla (TSLA) stock is set for a lower open on Friday as investors digest news of more price cuts in the United States. The stocks has been pressured for the last number of months, suffering a steady loss that has seen the EV leader down nearly 70% from its September 2022 high. Tesla stock has dropped more than 6% in Friday's premarket to trade near $116.
Tesla stock news
Tesla stock has fallen sharply from grace, and hopes were high that a rebound might be imminent. It so far has avoided the dreaded $100 level, but the bounce has not exactly been reassuring. Yesterday's CPI number did cause a small bounce as yields came lower, but the bottom still looks weak. If I was a betting man, I would think we have a liquidation point below $100, and that may be just too tempting for the market not to probe.
Tesla has been cutting prices in the US though, and this in my view is not a good look. It may boost sales figures, but one of the big reasons for owning Tesla has been its strong margins compared to other car markers. Cutting prices is going to eat into margins and reduce this comparative advantage. News this morning sees Tesla reportedly cutting prices now for US customers, having previously done the same in China. Reports indicate that the cuts bring the models into line for US government credits, but I am seeing reports of a near 20% price cut – large enough to definitely dent margins significantly.
Tesla stock forecast
Technically, the recovery needs in my view to get into the yellow highlighted zone. This starts at $126. This yellow zone is the consolidation from August to November of 2020. Below is support from another consolidation zone highlighted in purple. This is where Tesla could slip sharply below $100 before stabilizing at the bottom of the consolidation zone around $91.
TSLA daily chart
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