Following the publication of Tesla's (ticker TSLA) financial results for the fourth quarter of 2023, the company's stock price dropped. The TSLA share price in pre-market trading today is around $195, compared to yesterday's closing price of over $207 (approximately -6%).
Reasons for disappointment:
→ Earnings per share fell short of expectations at $0.71, compared to the Wall Street consensus of $0.73 per share.
→ Quarterly revenue amounted to $25.167 billion, which also fell below the expected $25.640 billion.
→ Additionally, a decrease in profitability was reported, partly attributed to issues with the introduction of the Cybertruck.
→ Tesla also provided a cautious outlook for 2024, warning that the growth rate in car production volumes could be "significantly lower" than in 2023. This is primarily due to the focus on launching the next-generation vehicle at the Gigafactory in Texas.
In October 2023, analysing the TSLA stock chart, it was noted that the price broke below the ascending trend. How does the situation look today?
→ The TSLA price failed to return to the ascending trend (shown in blue) of 2023.
→ The price continues to evolve within the descending trend (shown in red), the contours of which were noticeable as early as October.
After the release of this news, a bearish gap is likely to form at today's opening, and one should be prepared for:
→ Breaking the psychological level of $200 per share – this level may switch its role from support (noticeable in the price action on October 30-31) to resistance.
→ The TSLA share price dropping to the lower half of the descending channel. The median line of this channel will act as resistance.
→ Bears attempting to extend their success to bring the price down to the lower boundary of the channel (around $180).
Investor issues with TSLA stock have been evident for some time, as the price has been noticeably weaker than stock indices reaching peaks in December 2023 - January 2024. If the fundamental backdrop continues to be negative, it is possible that the red descending channel will shape the trajectory of TSLA's price in the first half of 2024.
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