Tesla – Technical Test Coming Up This Week

By | February 10, 2019

Here is a quote from a Zero Hedge article posted on Sunday morning citing a Reuters report of further job cuts at Tesla:

Following the latest round of job cuts that Tesla announced to start off 2019, the North America delivery division is seeing the most drastic impact. Reuters reports that the most recent jobs cuts reduced the company’s North American delivery division by more than half of its current staff, citing two workers who lost their jobs. 150 employees out of a delivery team of about 230 were let go from the company’s Las Vegas facility, according to the report. These employees were responsible for delivering Model 3s to eager US and Canadian buyers.

Link to the full article.

If true, it does not bode well for Tesla’s stock price this week. Let’s take a look at the daily Tesla chart and review where the important levels of support are located.

As most traders know Tesla shares have been trading in a wide horizontal channel pattern for nearly a year. More recently, they bounced off their January 24th low and traded higher. Last week shares turned back down and moved below the 50% Fibonacci retracement level of the channel range, and their 200 day moving average.

The zone of support delineated by Friday’s $298.50 low and the December lows at $294.75 would be the first support area to be tested if the stock decides to continue lower this week. Next is the $279.28 January low of several weeks ago.

It would be best for Tesla bulls if the initial support zone held. A failure in that area and the stock price would gain downside momentum as it headed back towards the January low. This $279.28 January level is not a well tested level of support. It is not likely to repel strong downside momentum. If it were to be taken out, the long term channel bottom would be next up and a defensive line in the sand. That’s about 18% lower from where Tesla closed on Friday.

Of course, if someone comes in next week and starts buying and can get the share price back above the 200 day moving average, and the 50% channel retracement level, it would be a very bullish development. That would have to be someone with a large amount of money and a strong personal interest in Tesla the company.

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