Does Tesla’s Price Action Signals Trouble? Critical Support Zones Ahead

Binni Ong
01-03

$Tesla Motors(TSLA)$ recent price action reflects a significant rejection at its all-time highs. The stock failed to sustain above the resistance zone near $400-$413 and experienced a sharp pullback, closing at $379.28 (-12.13%).

This move highlights a classic "wash and rinse" pattern, where initial optimism is swiftly met by profit-taking or selling pressure.

Key technical observations:

  1. All-Time High Rejection: Tesla tested and rejected the $400-$413 resistance zone, signaling strong selling pressure at these levels.

  2. Next Support Levels:$360: Immediate support zone, currently being tested.$300-$310: A stronger historical support area, which acted as a base in the past and could attract buyers if further selling persists.

Probably the drop is due to Tesla delivery report on 2 Jan 2025

Tesla’s delivery report on January 2, 2025, further underscores the bearish sentiment:

  • Annual Deliveries Decline: Tesla delivered 1.79 million vehicles in 2024, a 1.1% decrease from 2023, marking the first annual decline in deliveries.

  • Quarterly Miss: Q4 deliveries of 495,570 units fell short of expectations, adding to concerns about slowing demand.

  • Competition in China: Increased market pressure from BYD and other rivals has impacted Tesla's dominance, particularly in the world's largest EV market.

Outlook

The $360 support zone will be critical. A breach of this level could see Tesla retesting the $300-$310 range.

In the earlier article, I highlighted that Tesla support was around 385. This support level has been broken on last night's closing price of below 380.

Tesla's current support level appears to be around $385, a potential area of interest for short-term traders.

Short-term trading with DLCs

It's crucial to monitor price action closely at this level. DLCs magnify both gains and losses, so managing risk is key, especially with leverage.

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Tesla Earnings: Time to Beat or Give Back Post-Election Gains?
Tesla is expected to be released on January 29. It might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. EPS estimates of $0.76, which represents a year-over-year change of +7%. Revenues are expected to be $27.61 billion, up 9.7% from the year-ago quarter. --------------- Are you bullish on another beat and lift the stock higher? Or is it too hard to meet the high estimates of market and may give back the post-election gains?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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