Tesla (TSLA) hits its lowest share price since November 2020

Pick your poison if you are looking for reasons as to why the EV maker is hitting 2-year lows. There are plenty of headlines in the news lately surrounding Telsa’s stock price as it moves to an intra-day low of 166.19 on Tuesday. Over the last few days, Tesla has issued recalls for hundreds of thousands of cars due to problems related to everything from rear taillights to airbags. How about the problems in China? Not only is Telsa dealing with the Covid issues still plaguing the country (just like everyone else), but it also has to deal with an increase in competition from locals as well, such as Nio. And what about Elon Musk? First, he admitted that he sold TSLA shares to help raise cash to buy Twitter. Second, some investors are concerned that Musk is putting too much of his time into running Twitter rather than where they feel it can be better spent, such as running Tesla. In addition, Musk has told employees at Twitter that they need to work harder or they can leave. Many have left, prompting a recall of essential employees as advertising dries up. Some even speculate that twitter may not be there when they wake up in the morning!

Trade Tesla now: Login or Open a new account!

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore

All of this, not to mention a bear market in the NASDAQ, has caused Tesla’s share price to fall from a split-adjusted high of 424.50 on November 4^th, 2021 to today’s low of 166.19. This includes a selloff on the weekly timeframe during 8 of the last 10 weeks (including this week). The last time TSLA was this low was just before breaking out into new high territory during the week of November 16^th, 2020.

Source: Tradingview, Stone X

What you need to know about the Tesla stock split

On a daily timeframe, TSLAs share price has pierced through horizontal support at 167.50 (see weekly) to an intraday low of 166.19. However, price has since bounced and is trading in positive territory for the day. If price continues to move lower, the first support level is at the 161.8% Fibonacci extension from the lows of May 24^th to the highs of September 20^th, at 139.96. Below there, price can fall to the bottom trendline of the channel TSLA has been in for the last year, near 131.75, then additional horizontal support from late October 2020 at 122.28. However, notice that the RSI is making a higher low as price is making a lower low. This is an indication that price may be ready to bounce. In addition, TSLA has formed a descending wedge. The expectation for a descending wedge is that price will break out to the top side of the formation and retrace 100%. In this case the target is near 237.40. However, if price is to get there, it must first pass through resistance at 200.82. Above the target, resistance is at the gap opening of 257.50.

Source: Tradingview, Stone X

With recalls, worries about the impact of Covid in China, and the focus on Elon Musk at Twitter, Tesla shares have been selling off aggressively. However, the stock price is at support, with a diverging RSI and a reversal formation (descending wedge). Is TSLA ready to bounce? If all the bad news is already priced in, the share price could be ready for a bounce towards 237.40!

Learn more about equity trading opportunities.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.