Shares have fallen about 5% on the day, but it took awhile to get to this point.
The stock opened higher by a mere 88 basis points, climbed 1.35% at its highs and reversed lower.
Tesla has been a bit of a roller coaster over the past few months, but not quite the roller coaster that bears were hoping for.
There’s been a lot of drama surrounding the company and the CEO’s take on Bitcoin, but Tesla has continued to deliver solid results.
At the beginning of the month, Tesla delivered a record delivery result for the second quarter.
Then Tesla delivered a top- and bottom-line beat, logging more than $1 billion in profit as revenue nearly doubled year over year.
But what do we do with the stock?
Trading Tesla Stock
The stock continues to chop around its daily moving averages. I was tempted to use a weekly chart, but thought the daily chart may be of visual importance to traders.
Tesla stock is being rejected by the 21-day moving average, failing to hold the 200-day moving average and trading down into the 50-day.
Honestly, seeing it fail to hold this level might be for the best. That can usher in a move down to the 50-week moving average, a measure that has guided Tesla higher for quite some time.
A close below the 50-week would raise some eyebrows though, potentially opening up Tesla to further downside.
However, given the stock’s rather muted response to earnings, it’s hard to imagine a large selloff occurring without the overall market trading notably lower too. Of course, the market is under pressure on Tuesday, which doesn’t help matters.
So the downside is rather simple: Let’s see if Tesla stock can hold $600 and the 50-week moving average.
On the upside, a rotation over this week’s high would be best. Not only does that put Tesla over the post-earnings high, but also over all of its major daily moving averages.
That would open the door to $700-plus, then $780. For now, let’s go one step at a time and see what support level holds. For now, it’s the 50-day, but the stock may weaken in the days ahead.