Tesla, Inc TSLA gapped down slightly to start Wednesday’s session, where the stock ran into a group of buyers who drove it higher. Tesla is set to print its fourth-quarter financial results after the market closes.
When Tesla printed mixed third-quarter earnings on Oct. 19, the stock slid almost 7% the following day, but rallied almost 13% over the eight trading days that followed to reach a high of $198.92 on Dec. 1. Between that date and Wednesday, Tesla has declined almost 30%.
For the third quarter, Tesla reported revenue of $21.45 billion, which missed the $21.96-billion consensus estimate. The company reported earnings per share of $1.05, beating a consensus estimate of $1.
For the fourth quarter, analysts, on average, estimate Tesla will report earnings per share of $1.13 on revenues of $24.03 billion. Tesla reported on Jan. 2 that it delivered 405,278 vehicles in the fourth quarter, which missed the consensus estimate of 439,000.
Ahead of the event, Truist Securities analyst William Stein maintained a Buy rating on Jan. 23, 2023, and dropped the price target from $299 to $245… Read more here
From a technical analysis perspective, Tesla’s stock looks bullish heading into the event, having settled into an uptrend pattern on the daily chart. It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat. A company’s guidance for subsequent quarters, which is often provided during a conference call, can also heavily affect a stock’s direction.
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The Tesla Chart: Tesla reversed into an uptrend on Jan. 6 and has since made a consistent series of higher highs and higher lows. The stock’s most recent higher high was formed on Tuesday at $146.50 and the most recent confirmed higher low was printed at $124.31 on Jan. 19.
- On Wednesday, the stock printed a low-of-day at $138.07 and if Tesla receives a positive reaction to its earnings print and flies higher on Thursday, Wednesday’s low will be the next higher low within the pattern. If Tesla suffers a bearish reaction to its print and declines under $124, the uptrend will be negated, and a downtrend could confirm.
- If Tesla trends higher, bullish traders want to see the stock recapture the 50-day simple moving average as support, which would provide more confidence going forward. On Wednesday, the eight-day exponential moving average (EMA) crossed above the 21-day EMA, which is a positive sign.
- Tesla has resistance above at $152.19 and $166.71 and support below at $139.53 and $123.80.
- Listen to the earnings call here: