- TSLA stock sinks three days in a row despite Cybertruck unveiling.
- Analysts conclude that Cybertruck will find it difficult to turn a profit.
- TSLA stock is the midst of forming a bearish Three Black Crows pattern on the daily chart.
- Fed Chair Powell gave a hawkish speech at Spelman College, saying interest rate cuts were not yet on agenda.
Tesla (TSLA) stock opened lower for the third day in a row on Friday, enacting what could become the bearish Three Black Crows candlestick pattern. This means that TSLA stock looks primed to drop about 10% to the $210 support level or even further to the descending bottom line of the price channel in the $180s. TSLA stock is down 0.7%% at the time of writing, though bulls have been pushing the EV leader higher into the afternoon, while the NASDAQ Composite has added 0.4%.
Tesla’s Cybertruck unveiling impressed the analysts but not the market this week. Additionally, Federal Reserve (Fed) Chair Jerome Powell poured cold water on the idea that the central bank was close to cutting interest rates.
“It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance or to speculate on when policy might ease,” Powell said in a speech at Spelman College on Friday morning. “We are prepared to tighten policy further if it becomes appropriate to do so.”
Tesla stock news
The news on the Tesla Cybertruck at Thursday’s unveiling was that though the model stands out among a sea of Detroit competitors, the Cybertruck will do little for Tesla’s bottom line. CEO Elon Musk admitted as much when he said that it would be quite a challenge and require back-breaking volume to make the model cash-flow positive. Tesla delivered just 10 units at the event.
Analysts concluded similarly but were more upbeat at the prospect of Tesla broadening its portfolio. Morgan Stanley’s Adam Jonas views the Cybertruck as Tesla first foray into building more mainstream trucks and SUVs in the latter part of the decade. The Cybertruck, which was announced back in 2019, is predicted to remain a niche product.
“By 2025, we forecast Cybertruck will account for less than 5% of Tesla revenues and closer to 0% of profit,” Jonas wrote in a client note.
With 2,500 lbs. of towing capacity, the science-fiction looking design belies the truck’s competitive vein. In a head-to-head matchup between the Cybertruck, the Ford F-350 diesel, Rivian’s R1T, and the Ford F-150 Lightning, the Cybertruck came out on top, according to Tesla.
The lowest-priced model of the Cybertruck comes in at $61,000 before tax breaks and has a battery range of 340 miles. Notably, Tesla claims to retain 2.1 million reservations for the Cybertruck, which is quite robust.
Nasdaq FAQs
The Nasdaq is a stock exchange based in the US that started out life as an electronic stock quotation machine. At first, the Nasdaq only provided quotations for over-the-counter (OTC) stocks but later it became an exchange too. By 1991, the Nasdaq had grown to account for 46% of the entire US securities’ market. In 1998, it became the first stock exchange in the US to provide online trading. The Nasdaq also produces several indices, the most comprehensive of which is the Nasdaq Composite representing all 2,500-plus stocks on the Nasdaq, and the Nasdaq 100.
The Nasdaq 100 is a large-cap index made up of 100 non-financial companies from the Nasdaq stock exchange. Although it only includes a fraction of the thousands of stocks in the Nasdaq, it accounts for over 90% of the movement. The influence of each company on the index is market-cap weighted. The Nasdaq 100 includes companies with a significant focus on technology although it also encompasses companies from other industries and from outside the US. The average annual return of the Nasdaq 100 has been 17.23% since 1986.
There are a number of ways to trade the Nasdaq 100. Most retail brokers and spread betting platforms offer bets using Contracts for Difference (CFD). For longer-term investors, Exchange-Traded Funds (ETFs) trade like shares that mimic the movement of the index without the investor needing to buy all 100 constituent companies. An example ETF is the Invesco QQQ Trust (QQQ). Nasdaq 100 futures contracts allow traders to speculate on the future direction of the index. Options provide the right, but not the obligation, to buy or sell the Nasdaq 100 at a specific price (strike price) in the future.
Many different factors drive the Nasdaq 100 but mainly it is the aggregate performance of the component companies revealed in their quarterly and annual company earnings reports. US and global macroeconomic data also contributes as it impacts on investor sentiment, which if positive drives gains. The level of interest rates, set by the Federal Reserve (Fed), also influences the Nasdaq 100 as it affects the cost of credit, on which many corporations are heavily reliant. As such the level of inflation can be a major driver too as well as other metrics which impact on the decisions of the Fed.
Tesla stock forecast
Tesla stock has lost ground for three sizable candles in a row. This pattern is referred to as Three Black Crows and typically signals a bearish reversal. That forecast is hard to argue with since TSLA is trading beneath the 100-day Simple Moving Average (SMA) and has traded within a descending price channel since mid-July.
On the downside, Tesla could find support at the $210 level, which has been an occasional consolidation waystation this year. Otherwise a drop to the lower bound of the price channel in the $180s is in order over the coming month.
TSLA daily chart
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