Tesla (TSLA) Stock Price and Forecast: Tesla heads for support zone at $635

Tesla stock suffers again on Thursday, down to 200-day moving average.
TSLA is high beta and suffering from Chinese concerns after DIDI.
Delivery numbers have been strong for Tesla and other EV manufacturers.

Update: Tesla stock continues to suffer on Thursday as it loses 2.4% straight away to trade down to $628 in early trading. TSLA stock is now testing support from the 200-day moving average and the volume profile also shows this as a potential support zone. Given the market conditions please use stops when taking positions as volatility is high.

The strong bullish trend in place since the middle of June in Tesla came to a sudden halt on Tuesday when the stock dropped nearly 3% and then this was followed up by a 2% fall on Wednesday. In the process, Tesla has nearly retraced to the $635 level, which kick-started the impressive move higher.

Tesla key statistics

Market Cap	$621 billion
Price/Earnings	660
Price/Sales	23
Price/Book	28
Enterprise Value	$753 billion
Gross Margin	0.21
Net Margin	0.03
Average Wall Street Rating and Price Target	Hold, $657

Why is Tesla stock price falling?

Tesla shares retreated further on Wednesday as investors took a dim view of the potential read-across from the DIDI saga. Tesla has had some data concerns in relation to China previously with issues over cameras and car data.

Reuters reported on May 25 that Tesla had set up a local site in China to store car data. A previous story from Reuters on May 21 reported that Tesla cars were barred from some government compounds due to concerns over cameras installed in the Tesla vehicles.

Wedbush analyst Daniel Ives said, "The Didi move from Beijing has sent nervousness to China-exposed names such as Tesla. [...] China and Tesla continue to be in a regulatory back and forth that is concerning investors."

Also perhaps weighing on Tesla was a tweet sent by Tesla CEO Elon Musk over the weekend in which he said he did not expect self-driving to be too difficult. "Generalized self-driving is a hard problem, as it requires solving a large part of real-world AI. Didn’t expect it to be so hard, but the difficulty is obvious in retrospect. Nothing has more degrees of freedom than reality."

Tesla stock forecast

The trend has firmly been turned around, and for now the bears are back in control. This is unlikely to change on Thursday as global stock markets wobble a bit. Tesla has retraced to the 21-day moving average at $648 but closed below it. This was not the best zone to buy the dip as the volume support was not strong enough. Better to wait until $630 as this has support from the 200-day moving average and also has an increase in volume as can be seen from the volume profile on the right side of the chart. More volume means more price support/resistance.

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