Shares of Tesla (TSLA) are in need of a recharge.
Really, though, the problems with Tesla began several weeks ago when it delivered a disappointing quarterly delivery result.
The stock on Oct. 3 tumbled more than 8% in reaction to that report, a move that sent Tesla below $250 support. While the stock tried to reclaim that mark the next day, it went on a five-day skid that sent it below $225.
Then Tesla reported a mixed earnings result after the close on Wednesday, Oct. 19, and the shares fell 6.5% on Thursday.
Even after it again found its footing, the stock was down as much as 7.4% on Monday.
The stock was hitting 52-week lows after a surprise price cut raised questions about current demand. It also comes after Chinese equities fell hard in today’s session.
Trading Tesla Stock at 52-Week Lows
On the chart above, notice how Tesla stock broke below $250, then decisively lost the $225 level as well, as the latter became clear resistance.
As we test new lows, I like the responsiveness we’re seeing in the low-$200s. Ahead of the earnings, this was a key area for the stock.
But the longer it builds below $207, the more concerning the charts start to look.
On the upside, the bulls need to see three things.
First, the stock needs to reclaim $207. Second, they need it to reclaim the 10-day moving average, which has been active resistance.
While doing those two things may get the stock up to the $225 to $227 zone — a healthy 14% rally off the low — it will be hard for Tesla bulls to enjoy a sustained rally unless the shares can reclaim $225 as well.
On a bigger-picture outlook, that could open the door to $250, then $262.50.
That all said, the charts are struggling at this point. If Tesla stock needs to go lower, sub-$200 could put the low-$180s in play.
After a major breakout over $165, Tesla stock twice found support in the low-$180s in 2021. If the shares are to go lower, this could be a key support area over the next few weeks.
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