Tesla (TSLA) Price Also Has Its Ups and Downs. It's Below $920 Currently

Tesla (TSLA) Price Also Has Its Ups and Downs. It's Below $920 Currently
  • Tesla stock tumbles after beating earnings estimates
  • TSLA shares hit by concerns over supply chain issues.
  • Apple and big tech could turn the market next week.

Tesla (TSLA) staged a modest recovery on Friday, but the real damage was done on Thursday when the stock shed nearly 12%. Friday's move was not even that impressive given Tesla's high beta, a fact that would usually see it bounce significantly more than the major indices. As we know well by now high, growth is not the sector of choice this year, and Tesla does straddle this space. Investors are moving back to more traditional sectors and metrics for their portfolios, and the era of high flying growth is coming to an end, for now at least.

We view this as a positive event, stretching too far would have resulted in an ugly snapback or bubble popping most likely. This stabilisation should continue for the year with one or two speculative dead cat bounces along the way. We may just get one of those next week as the remainder of big tech gets a chance to continue on from where Apple led. Amazon (AMZN), Google (GOOGL) and Facebook (FB) are all reporting earnings this week. Positive earnings should steady sentiment, and this would then also likely spread to some high growth names. However, in the longer term, we expect balance sheets rather than growth to outperform this year.

Tesla Stock News

Tesla is not just pure growth, although it is managing to do that rather impressively if the latest results are anything to go by. It will stay with the pace, while other start-up EV manufacturers are more likely to fade away. Tesla created the EV space and remains the brand leader. This will likely not change since it has positioned itself as a premium brand.

It will likely face more competition, but we do not see it losing quite as much market share as that forecast by Bank of America. Forecasting a drop from 69% to 19% market share in the space of two years does seem a bit headline-grabbing. The problem for Tesla is its valuation got too ahead of itself, so it is likely to underperform in this new environment despite continued strong earnings and revenue growth.

Tesla Stock Forecast

The bearish trend is now well-established. Thursday's losses only followed on from what we identified back in early January. The spike higher failed, and then it created a lower low, which confirmed the mid-December low.

Even Friday's price action set a lower low than Thursday before the bounce set in. Resistance at $987 is last week's high and is first up. A close above that is significant and a new bar above that will signify a small short-term uptrend. Otherwise, the medium-term downtrend remains in control with support at the 200-day moving average, which sits at $814 currently.

Tesla Stock Price and Forecast: TSLA struggles set to take break this week - 1

Tesla (TSLA) chart, daily

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