The Impact of Tesla’s Earnings Report on Stock Price

Tesla (TSLA) shares took a hit in extended trading after the electric vehicle maker reported a 45% drop in second-quarter profit, along with a reduction in the average selling price of its vehicles from the previous year. Additionally, concerns were raised about rising artificial intelligence (AI) costs. The stock tumbled nearly 8% following these announcements, signaling a potential shift in momentum for the company.

Key Takeaways

• Tesla’s weaker-than-expected quarterly results have dampened investor sentiment, leading to a sell-off in the stock.
• Despite bullish technical indicators, Tesla shares are facing downward pressure following the earnings report.
• Investors should monitor key chart levels, including $220 and $198, for potential buying opportunities.
• If Tesla’s uptrend resumes, a price target of $360 could be achievable based on technical analysis.

Earnings Hits Brakes on Bullish Technicals

Following an inverse head and shoulders pattern earlier this year, Tesla’s stock price had been on an upward trajectory, breaking above a key downtrend line. The rally was supported by above-average trading volume, indicating institutional investor participation. Recently, the stock has formed a pennant pattern, suggesting a continuation of the uptrend. Additionally, the 50-day moving average is poised to cross above the 200-day moving average, signaling a potential bullish signal known as a golden cross.

However, despite these positive technical signals, Tesla’s shares have faced selling pressure post-earnings, leading to a potential shift in momentum.

Monitor These Levels Amid Post-Earnings Selling

Investors should pay attention to key levels on the chart where Tesla shares could find support amidst post-earnings selling pressure. The $220 level represents a critical area where buyers may step in near the multi-month downtrend line. A further retracement could see support around $198, where previous swing lows and neckline of the inverse head and shoulders pattern converge.

Watch This Price Target if Uptrend Resumes

If Tesla’s shares manage to resume their uptrend, investors can use the measuring principle to project a potential price target. By calculating the distance of the previous uptrend and adding it to the pattern’s top trendline, a price target of $360 could be forecasted based on recent price movements.

Following the earnings report, Tesla shares experienced a 7.8% decline in after-hours trading, reflecting investor concerns about the company’s financial performance.

It is important to note that the views expressed in this article are for informational purposes only and should not be considered as investment advice. Investors should conduct their own research and consult with financial advisors before making any investment decisions.

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