14-day Premium Trial Subscription Try For FreeTry Free

Technical Analysis: Tesla (TSLA) Faces Bearish Trends, Oversold Status, and Potential Rebound

StockInvest.us, 4 weeks ago

Tesla Technical Analysis of Tesla, Inc.

Tesla, Inc. (TSLA) closed at $147.05 on April 19, 2024, marking a decline of 1.92% from the previous trading day. Key technical indicators reveal a bearish sentiment. The RSI (Relative Strength Index) of 29 suggests the stock is currently oversold, which might typically indicate a potential rebound or at least some short-term stabilization. However, the MACD (Moving Average Convergence Divergence) stands at -1.57, accentuating the prevailing downtrend.

The stock is trading significantly below both its 50-day moving average ($178.66) and 200-day moving average ($224.98), further reinforcing the bearish trend. The absence of any immediate support levels combined with the recent new year low of $146.22 compounds the challenges facing the stock in the upcoming sessions. With resistance observed at $164.9, there remains a substantial gap for the stock to cover before reversing its current downtrend.

Fundamental Analysis

Tesla's market capitalization stands at roughly $468.32 billion, positioning it as a heavyweight in the EV sector despite recent setbacks. A key next event is the earnings announcement due on April 23, 2024, which might critically influence the stock's near-term trajectory. The earnings guidance being projected below analyst expectations further dampens the immediate outlook for Tesla. Despite these concerns, the analyst consensus errs on the optimistic side, labeling the stock as a 'Buy' with forecasts ranging significantly from a low of $85 to a high of $526.67, with a more realistic median target of $195.

Tesla's PE ratio currently stands at 34.28, which implies a substantial premium compared to the market, especially given the lowering earnings per share of $4.29.

Tesla Intrinsic Value and Long-term Investment Potential

The discounted cash flow (DCF) analysis provides an intrinsic value of $62.16, suggesting that the stock is significantly overvalued at its current price. This could indicate bloated market expectations which are not aligned with the company's financial fundamentals. Long-term investment potential, while promising given Tesla's innovative edge and sector leadership, could be marred by short to mid-term operational and financial turbulence.

Predictions for Upcoming Trading Sessions

Given the current technical indicators and negative news flow, Tesla’s stock might face downward pressure in the next trading day and potentially over the subsequent week, particularly in the absence of positive surprises in the upcoming earnings report. Any positive shift would largely depend on the earnings outcome and forward guidance provided on April 23.

Overall Evaluation

In light of the above analysis, Tesla is categorized as a 'Hold' candidate. The recommendation to hold is driven by the near-term uncertainty and the possibility of further price declines, balanced against the long-term growth prospects that might be realized if the company successfully overcomes its current operational bottlenecks and market skepticism. Investors should closely monitor forthcoming earnings and management commentary which could provide critical clues to the company’s trajectory in the challenging economic environment.

Check full Tesla forecast and analysis here.