- Tesla stock continues to outperform as it closes more or less flat on Friday.
- Equity indices close lower by 0.7% for S&P 500 and 0.5% for the Nasdaq.
- Tesla delivery times continue to fall for most models in China.
Tesla (TSLA) stock continues its relative outperformance as the stock closed more or less flat on Friday while the main indices continued their recent retreat. Tesla has now ignored the island formation we spoke about recently.
Tesla stock news
There has been a lot of delivery speculation surrounding Tesla recently. Delivery times are falling in China. Bears have used this to say it points to a lack of demand, while bulls use the opposite loging, saying Tesla is ramping up production and generating more efficiencies. An argument can be made for both approaches, but the stock is putting in a short-term bottom. CNEVPost is now reporting that most models in China only have a 1-week waiting time. Reuters reports that production capacity at Giga Shanghai has undergone a recent expansion with the project now complete.
Tesla stock forecast
EV stocks in general have been performing well, and most have outperformed the main indices since the sell-off last week. The Inflation Reduction Act is part of the reason as this includes some further incentives for EVs. However, this may also signal that risk appetites are returning and we may be about to at least put in a short-term bottom. Tesla initially created an island formation when it sold off heavily last week, but it has since moved to negate that negative technical pattern. That now leaves the pattern in a bit of a no man’s land, and more sideways or choppy trading is likely.
We likely need a further catalyst, which will come from Wednesday’s Fed interest rate decision. Not so much the decision itself, which is likely to be 75 bps, but the expected continued hawkish tone from the Fed. Until Wednesday, we expect some more choppy trading with more risk reward to the upside in my view. $314 is the first resistance. The double bottom at $266 is the major support. A break of that level, and May and June lows of $208 are likely to be retested. That too was an important double bottom.
Tesla daily chart