Skip to main content
Publish date:

Tesla Earnings Preview: Here Are the Key Levels to Know

Tesla will report earnings after the close on Oct. 20 and the stock is at multimonth highs. Can it make new all-time highs after the report?

Tesla  (TSLA) - Get Tesla Inc Report has been on a monster run lately, climbing into its earnings report after the close on Oct. 20.

While the overall market has been trading incredibly well lately, it underwent a mild correction from September into the first few weeks of October.

If you looked only at a Tesla chart, though, it wouldn’t seem that way.

Tesla stock is working on its ninth straight weekly gain and 12th weekly gain in the past 13 weeks. From its low on Aug. 16 to its recent high, the Palo Alto, Calif., electric-vehicle giant's shares have gained more than 35%.

That outpaces the 29.5% gain we’ve seen in Ford  (F) - Get Ford Motor Company Report during the same stretch, along with the 26% gain in General Motors  (GM) - Get General Motors Company (GM) Report.

In other words, the autos have been trading quite well.

Tesla has had strong delivery momentum, trouncing expectations for the third quarter.

Its momentum has been present in China, too, with strong delivery results there as well.

Will that momentum translate to earnings? Analysts think so, but what does the chart say?

Ford is a holding in the Action Alerts PLUS member club. Want to be alerted before they buy or sell F? Learn more now.

TheStreet Recommends

Trading Tesla Stock

Daily chart of Tesla stock.

Daily chart of Tesla stock.

Tesla has been a trader’s dream: Each dip has been bought and that has led to numerous breakouts over the past few months.

Most recently, we were watching the key $780 level and the $800 mark. The shares pushed through the former and broke out over the latter.

Then Tesla powered right through the 78.6% retracement, before being rejected by the $880 resistance level. While bulls likely enjoyed the latest run, they find the stock in a tough spot now after Tuesday’s rejection.

From here, we have to keep an eye on the all-time high up $900.40. With a strong report, this level will be key as bulls will look for a push to new highs.

Above $900 and it won’t be long before the talk for $1,000 begins, which also lands Tesla near a $1 trillion market cap.

The biggest risk here is an open above the prior all-time high and a reversal lower. That could change the short-term momentum and leave Tesla stock susceptible to a larger fade.

If the shares instead pull back on the earnings report, let’s keep the 78.6% retracement and 10-day moving average in mind near $823. From the recent high, a dip to this level would represent a decline of just over 6%.

If a larger decline is in store, the 21-day moving average and $800 breakout level will be on watch, representing a decline of about 9%.

Either way, the results should be pretty strong, so I don’t expect too much downside — at least right now. Although with Tesla, you can never be sure what will happen.