Tesla Fell More Than 12% After Earnings. Where Might It Go Next?
CEO Elon Musk of Tesla 
TSLA has said that if you believe in the future of his EV company’s FSD technology (short for “full self-driving”), then you should probably be invested in TSLA stock. If you don’t have faith in FSD, then perhaps you shouldn’t be.
I don't know about that, but one thing that technical analysts can understand is the stock’s chart, seen here as of midday Wednesday (July 31):
As the chart above shows, TSLA rallied heading into release of its earnings on July 23 after the bell, but has mostly pulled back since then -- including falling more than 12% on July 24.
Could such action have been forecasted and acted upon? Let’s check it out.
The first thing to note is the stock’s inverse head-and-shoulders pattern -- the set of three purple curved lines in the chart above. That pattern is historically bullish.
Tesla’s breakout from the admittedly crooked neckline (the downwardly sloping purple line above) ran some 42% to the upside before the stock apexed at $271 intraday on July 11.
However, July 11 is in the past. What about the future?
As of midday Wednesday, Tesla was still about 15% below its $271 peak. Tesla’s daily Moving Average Convergence/Divergence (MACD) was also postured rather bearishly.
The stock’s 12-Day Exponential Moving Average (EMA) -- denoted by the black line at bottom right in the chart above – was below Tesla’s 26-Day EMA (the orange line above). Add in the fact that the stock’s histogram of its 9-Day EMA (the blue bars at the chart’s bottom right) was below zero and that’s an historically bearish technical pattern.
Meanwhile, the stock’s Relative Strength Index (the gray line with the purple background in the chart above) appears neutral, but is curling back in a bullish direction.
But what if we erase our inverse head-and-shoulders pattern and make it part of a larger story?
Check this out:
Tesla’s RSI and MACD are both the same in this chart as they were in the first one, but this graph no longer shows an aged inverse head-and-shoulders pattern that has already run its course.
Instead, this chart shows an historically bullish cup-with-handle pattern, as denoted by the big purple arc above.
In fact, the diagram above appears to show multiple technical positives for Tesla:
• The cup-with-handle pattern has a $271 pivot point, marked with the small purple line at right.
• Tesla is trading above both its 50-Day Simple Moving Average (the blue line) and its 200-Day SMA (the red line).
• The 50-Day SMA has crossed above the 200-day one, forming a so-called “golden cross.” That’s historically a bullish sign.
Things will likely look even better for Tesla if the stock can take back the 21-day Exponential Moving Average (EMA) to get the swing traders in line. That would likely budge the 9-day EMA’s histogram (the blue bars at bottom right) into positive territory, which is typically bullish.
It would also probably push the 12-Day EMA (the black line at bottom right) above the 26-Day EMA (the orange line at right). That’s an historically bullish sign as well.
This presentation discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. This presentation discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty as to its adequacy, completeness, accuracy or timeline for any particular purpose of the above content. Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC. TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third-party platform.
TSLA has said that if you believe in the future of his EV company’s FSD technology (short for “full self-driving”), then you should probably be invested in TSLA stock. If you don’t have faith in FSD, then perhaps you shouldn’t be.I don't know about that, but one thing that technical analysts can understand is the stock’s chart, seen here as of midday Wednesday (July 31):
As the chart above shows, TSLA rallied heading into release of its earnings on July 23 after the bell, but has mostly pulled back since then -- including falling more than 12% on July 24.
Could such action have been forecasted and acted upon? Let’s check it out.
The first thing to note is the stock’s inverse head-and-shoulders pattern -- the set of three purple curved lines in the chart above. That pattern is historically bullish.
Tesla’s breakout from the admittedly crooked neckline (the downwardly sloping purple line above) ran some 42% to the upside before the stock apexed at $271 intraday on July 11.
However, July 11 is in the past. What about the future?
As of midday Wednesday, Tesla was still about 15% below its $271 peak. Tesla’s daily Moving Average Convergence/Divergence (MACD) was also postured rather bearishly.
The stock’s 12-Day Exponential Moving Average (EMA) -- denoted by the black line at bottom right in the chart above – was below Tesla’s 26-Day EMA (the orange line above). Add in the fact that the stock’s histogram of its 9-Day EMA (the blue bars at the chart’s bottom right) was below zero and that’s an historically bearish technical pattern.
Meanwhile, the stock’s Relative Strength Index (the gray line with the purple background in the chart above) appears neutral, but is curling back in a bullish direction.
But what if we erase our inverse head-and-shoulders pattern and make it part of a larger story?
Check this out:
Tesla’s RSI and MACD are both the same in this chart as they were in the first one, but this graph no longer shows an aged inverse head-and-shoulders pattern that has already run its course.
Instead, this chart shows an historically bullish cup-with-handle pattern, as denoted by the big purple arc above.
In fact, the diagram above appears to show multiple technical positives for Tesla:
• The cup-with-handle pattern has a $271 pivot point, marked with the small purple line at right.
• Tesla is trading above both its 50-Day Simple Moving Average (the blue line) and its 200-Day SMA (the red line).
• The 50-Day SMA has crossed above the 200-day one, forming a so-called “golden cross.” That’s historically a bullish sign.
Things will likely look even better for Tesla if the stock can take back the 21-day Exponential Moving Average (EMA) to get the swing traders in line. That would likely budge the 9-day EMA’s histogram (the blue bars at bottom right) into positive territory, which is typically bullish.
It would also probably push the 12-Day EMA (the black line at bottom right) above the 26-Day EMA (the orange line at right). That’s an historically bullish sign as well.
This presentation discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. This presentation discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty as to its adequacy, completeness, accuracy or timeline for any particular purpose of the above content. Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC. TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third-party platform.
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