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Tesla Stock Alert: To Buy the Dip or Pass

Tesla stock is trading lower after earnings. Here are the must-know levels now.

Tesla  (TSLA) - Get Tesla Inc Report shares are lower on the day, dropping about 7.5% after the company reported its fourth-quarter earnings.

Coming into the session, Tesla shares were trading surprisingly quiet, opening lower by 0.43%. However, the sellers have really leaned into this one.

However, the quarter was quite good.

Sales and profit surged year over year, as did deliveries. Revenue came in more than $1 billion ahead of consensus estimates, while automotive gross margins were firm at 29.2%.

However, not everything was perfect (as one might expect with the stock down on the day).

The company’s commentary surrounding the supply chain took away some of the shine from the fourth-quarter results.

Further, a delay until at least 2023 for the Cybertruck also disappointed some investors. That may be good for Ford  (F) - Get Ford Motor Company Report, although shares are slightly lower on the day. 

The stock can't shake off that news though, even as the Austin, TX. facility has started production and as the company plans for a new factory by the end of the year.

Trading Tesla Stock

Daily chart of Tesla stock.

Daily chart of Tesla stock.

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The $900 area has been rather significant this week. It’s where Tesla stock opened for trading on Monday and this area marked the low on Tuesday and Wednesday.

Breaking below this zon today has Tesla dipping below last month’s low at $886, but so far, it’s holding this week’s low near $851.50.

If we lose this level, it opens the door to a more interesting level near $800.

Around $800, the stock finds its 50-week and 200-day moving averages, as well as channel support.

Tesla stock hasn't tested its 200-day since mid-August, which is quite impressive given the recent fate of most tech and growth stocks.

For now, short-term bulls can look for an undercut and reclaim of this week’s low. That could get a bullish reversal brewing, but the $800 zone is the bigger one to watch.

On the upside, that zone was $1,040 to $1,060. It’s where Tesla stock would have found channel resistance and the daily VWAP measure, as well as the 21-day and 50-day moving averages.

If we do get a bounce going from current levels, keep an eye on $900 on the upside, then last week’s low near $940, followed by the declining 10-day.

I know this is a lot of levels to throw at traders, but this is an “if-then” game based on reactions, not predictions. For now, see how it handles $851.50. If it fails, the 200-day could be next.