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Tesla’s share price in decline ahead of earning’s call


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Tesla’s share price in decline ahead of earning’s call

Despite analysts predicting a great performance this week, the share price continues to look lacklustre.

bg_tesla_motor380176087.jpgSource: Bloomberg
 
IG Analyst | Publication date: Monday 24 January 2022 

Most analysts believe that Tesla is on a solid footing for its fourth quarter (Q4) 2021 earnings call on January 26th, yet the share price has been in decline since the beginning of the year and is fast approaching its December low at $886.

The company was not only the best-selling electric vehicle brand in Europe in 2021, but also doesn’t seem to have been caught out as badly as other carmakers by the automobile industry's chip shortage during the pandemic. It successfully pivoted its production capabilities whilst opening two new factories and reported record deliveries for its electric vehicles. Yet, since the beginning of January the share price has given back over 20% of last year’s gains, which is why a closer look at the technical picture might be of interest to investors.

Ever since this year’s first day of trading and Tesla’s strong rise to $1212, close to last year’s November peak at $1247, the share price has been drifting lower towards the January 2021 high at $900 and the December trough at $886. A fall through the latter would put the 200-day simple moving average (SMA) at $810 on the cards.

Not too far below this the April 2021 high and 55-week SMA offer potential support at $794 to $786. This support area should withstand the first test, if probed. Should the car company exceed analysts’ expectations during this week’s earnings call, and if this isn’t already priced into its share price, a rise back to the $979 to $1000 region may well ensue. It contains the November and early January lows as well as psychological resistance.

From a technical perspective Tesla would need to extend it gains above the last swing- and mid-January high at $1115 to reignite its uptrend.

24012022_TSLA-Daily.pngSource: ProRealTime
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