Tesla (TSLA) Stock is Off Limits For Now
Tesla’s stock trades on market sentiment more than any other stock, so until things become more positive, I’m staying away. Here’s why.
avatar
Mike Sakuraba graduated with double major of English and Economics. Part time writer, part time investor, full time dad. Mike loves writing about technology, sports, and investing.
2023-09-23 11:52

Is Tesla Stock Off Limits For Now?
Last week I wrote about how the UAV strike could be a bullish catalyst for Tesla (NASDAQ: TSLA) stock. I still think it could be but as of now, Tesla’s stock looks like it might be off limits. Why? Market sentiment. Not only is the next week or two a historically bearish time of year, but Tesla is facing a bunch of negative headlines as well. Tesla’s stock trades on market sentiment more than any other stock, so until things become more positive, I’m staying away. Here’s why.
Tesla (TSLA) Stock is Off Limits For Now
Negative headlines abound this week as a report out of China showed a major decline in retail sales. The metrics showed that only about 10% of the expected Tesla vehicles were sold, which is likely a reason why the stock fell by nearly 10% this week. The real reason? Tesla shut down much of its facilities in the third quarter to allow for enhancements for future vehicles. Tesla is also releasing the all-new Model 3 next month which is likely causing some consumers to hold off.

Accompanying these headlines was the usual analysis that Tesla’s stock is overpriced, especially with declining margins in recent quarters. Tesla will always be targeted by bears and so far in September the stock has struggled because of it. Seasonality will always play a factor and the recent weakness in the markets is the main reason why Tesla’s stock continues to plunge lower.

Tesla Stock Forecast
For now, Tesla’s stock is off-limits. Combined with the seasonality is what looks to be a weaker-than-expected deliveries report for the quarter. While we did know that it would be lower than expected, it is usually a reason for the stock to decline. We may not have a positive catalyst until the earnings report and even then, the bearishness could continue into the end of the year. Of course, if we’re going to talk about seasonality, the last three months of the year are usually bullish so there is a chance that Tesla rebounds alongside the broader market.

Technically speaking, Tesla lost the 50-day moving average this week and is on target to decline to its 100-day moving average price of about $238. We could see a bounce but remember that most stocks always revert to the 200-day moving average over time. Currently, this is set at about $204, but moving averages can climb quickly, especially after the rally that Tesla had over the past couple of months.

For now, I’m targeting the 100-day as a key level of support and will keep my eye on how the 200-day catches up to the price. In the short-term, I anticipate more weakness or at the very least, not much in the way of bullish momentum. I do think that we are reaching oversold territory and will find support over the next few weeks. You could start buying dips if you are bullish or consider selling puts against the stock at support levels into the end of the year.


Disclaimer: I have no positions in any of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. All information should be independently verified and should not be relied upon for purposes of transacting securities or other investments. See terms for more info.

Rate this article

positive
negative
Published On
2023-09-23 11:52

avatar
About the Author
Mike Sakuraba graduated with double major of English and Economics. Part time writer, part time investor, full time dad. Mike loves writing about technology, sports, and investing.


buy-coffee
You've read 1 article in the last year
..thank you for supporting us and for visiting our site. Unlike many other sites, The Dog of Wall Street is available for everyone to read. Our focus is to provide great content for free. Do you like what we are doing? Buy us a cup coffee. It is the fuel that keeps us going..

Looking Ahead to Tesla's Earnings: What Can We Expect?
Is there any stock that has been more talked about than Tesla (NASDAQ: TSLA) as of late? It’s a company that is always in the spotlight but the stock is under some heavy scrutiny this year and deservedly so.
By Mike Sakuraba | 1 month ago

2 Stocks to Load Up On During This Correction
Another volatile week for markets and investors are starting to feel a little uncomfortable.
By Mike Sakuraba | 1 month ago

2 Earnings to Watch for Next Week
This article is merely meant to talk about two companies that I’ll have my eyes on for earnings.
By Mike Sakuraba | 1 month ago

2 Stocks That Could Explode in Q2
Here are two stocks that I think could explode in the second quarter.
By Mike Sakuraba | 1 month ago

2 Trillion Dollar Companies in the Making
One thing for certain about these two companies is that I see the potential in how they can grow.
By Mike Sakuraba | 1 month ago

Is Tesla Back? Has TSLA Stock Finally Bottomed?
Tesla Stock Analysis: Robo Taxis to the Rescue?
By Mike Sakuraba | 2 months ago

2 Stocks to Buy During an April Pullback
Here are 2 stocks I’d buy during an April pullback.
By Mike Sakuraba | 2 months ago

TSM Stock: Is This The True Winner of the AI Race?
TSM’s stock has gained nearly 40% this year which is about half of NVIDIA has returned.
By Mike Sakuraba | 2 months ago