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Tesla’s stock price is coming under pressure below the $700.00 level as investors remain unimpressed with Tesla’s latest earnings data and Bitcoin starts to pullback on the cryptocurrency market.
Before digging into Tesla’s earning numbers it is probably best to touch upon the most contentious part of the quarterly earnings report, which is the Bitcoin component. Tesla revealed that they sold 10 percent of their Bitcoin holdings.
Tesla made huge profits last month by selling Bitcoin, after they purchased it for roughly around $37,000. Analysts feared these gains masked what the real profit numbers, which were also distorted by environmental credits.
Tesla sell its own environmental credits to other automobile makers, who do not meet admission standards. Both these factors contributed to the $438 million profits the company made for the first three months of the year.
It is particularly noteworthy that profits we dented by Elon Mush. Musk struck a huge compensation plan in 2018, and took $299 million in profits last quarter. All these factors have been weighing on the world’s most valuable car makers share price.
Analysts also speculated that the company is going to face chip shortage problems in the future. Tesla cars need special microchips which are running into supply problems. This could hamper profits and production this quarter.
On the medium to longer-term horizon, Tesla’s prospects still look good. An ongoing recovery in the global economy and a move towards green energy in the US all bode well for Tesla’s share price if the company can get past short-term headwinds.
Tesla Short-term Technical Analysis
According to the four-hour time frame Tesla’s stock price has staged a bearish breakout from a symmetrical triangle pattern and has now fallen under the $700.00 support level after breaching the triangle pattern.
Tesla’s share price could fall towards the $660.00 to $660.00 price area if sellers are able to breach the technically important $690.00 support zone.
Key support for Tesla’s share price below the $650.00 level is found at the $620.00 level, and of course the March low.
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Tesla Medium-term Technical Analysis
According to the daily time frame Tesla’s is still trading inside a large broadening wedge pattern as long as bulls are able to hold the share price above the $660.00 level.
Technical analysis also shows that the Parabolic SAR indicator is issuing a sell signal while Tesla trades under the $730.00 level.
It should be noted that if Tesla’s share price can start to get above the $730.00 level than the $770.00 and $830.00 levels remain the likely target prior to the $1,000 levels.
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