Tesla Stock Analysis: Neutral Stance with Potential Bearish Signals Ahead

StockInvest.us, 1 month ago

Tesla Technical Analysis

Tesla, Inc. (NASDAQ: TSLA) closed at $173.79 on June 10, 2024, experiencing a decline of 2.08% from the previous trading day. The stock's price fluctuated between a low of $173.17 and a high of $178.57. The trading volume for the day was 40.77 million, markedly lower than the average volume of 90.35 million, indicating reduced trading activity.

The Relative Strength Index (RSI14) of 49 suggests that TSLA is neither overbought nor oversold, positioning itself in a neutral stance. The Moving Average Convergence Divergence (MACD) of 0.31 further complements this neutrality, indicating slight bullish momentum but not strong enough to rely on for significant positive movement.

The 50-day moving average ($172.07) has recently crossed below the 200-day moving average ($210.56), creating a "death cross" pattern, often perceived as a bearish signal. The current Average True Range (ATR) of 3.83 implies expected moderate volatility ahead.

Support and Resistance

Immediate support for TSLA is found at $164.90, while resistance is pegged at $183.28. Given that the stock is closer to its support level and trading under both the 50-day and 200-day moving averages, the next few trading sessions could be critical. A break below support may signal further downside potential.

Fundamental Analysis

Tesla's market capitalization stands at $536.90 billion. With a Price-Earnings (P/E) ratio of 43.06 and Earnings Per Share (EPS) of $3.91, the stock is priced high compared to traditional valuation metrics, perhaps reflecting the market's expectation of significant future growth.

Tesla In the upcoming week, the vote on Elon Musk's $56 billion pay package is a key event that could influence stock performance. Institutional stances, like CalSTRS' opposition, create uncertainty around investor sentiment. Conversely, reports of increased hiring could suggest Tesla's confidence in its expansion plans.

Intrinsics and Analyst Ratings

The discounted cash flow (DCF) valuation places Tesla's intrinsic value at roughly $66.56, significantly lower than its current market price, insinuating the stock might be overvalued. Analysts' price targets vary widely from $85 to $526.67, with a consensus around $236.55, indicating a potential upside.

The consensus among analysts maintains a generally positive outlook, with the bulk rating it as a 'Buy' or 'Hold'. The absence of 'Strong Buy' and 'Strong Sell' ratings illustrates the cautious optimism prevalent among market watchers.

Short-term and Long-term Projections

For the next trading day and the upcoming week, expect TSLA to exhibit moderate volatility with potential reactions to news regarding the AGM vote, Musk's compensation package, and hiring trends. Should the AGM decisions favor Elon Musk, a short-term boost might occur. However, if major shareholder blocs oppose, the stock may face downward pressure.

Long-term, Tesla's growth prospects driven by strategic expansions and market leadership in electric vehicles are strong, but current overvaluation signifies that price corrections could be on the horizon.

Overall Evaluation

Tesla stock is evaluated as a 'Hold' candidate. Despite aggressive growth and substantial market cap, the stock's premium valuation, coupled with technical and fundamental uncertainties, underscores a wait-and-watch strategy, especially pending the outcomes of upcoming shareholder votes and earnings announcements.

Check full Tesla forecast and analysis here.