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Can Tesla Reignite Its Spark?

Published 04/03/2024, 01:45 AM
Updated 07/09/2023, 06:31 AM

This morning, I made my debut on CNBC’s show Worldwide Exchange with Frank Holland.Tesla Inc-Daily Chart

Here are the notes I prepared.

At the start of 2024, the entire EV space already had some issues:

  1. infrastructure-not really setup yet to support EVs easily and or timely
  2. weather-blackouts cut the ability for EVs to charge
  3. competition-with tesla losing market share to Ford (NYSE:F), General Motors (NYSE:GM), Rivian (NASDAQ:RIVN), and others, Tesla (NASDAQ:TSLA)'s higher price became an issue. Plus hybrids have fared alot better-why Toyota (NYSE:TM) stock soared
  4. China also created lots of competition
  5. used EV cars are sitting on lots without demand-Hertz dropped them from their car rentals
  6. Musk-alot of controversies about his attention on Tesla diverted to his other interests
  7. Cybertruck unsuccessful

Since the stock dropped from $265 to the recent lows of $160, Tesla has struggled to regain upward momentum:

  1. Supply chain a smaller issue but still an aspect
  2. Musk-wants more control of Tesla at the same time, Musk has become more political
  3. Tesla just raised prices on the Model Y SUV while other EV companies cut prices
  4. Tesla delivered way fewer vehicles than expected
  5. Price of raw materials are rising

Positives

  1. Tesla is still a dominant software company-self driving, solar, batteries, navigation, factory automation, and selling its software subscriptions.
  2. Brand loyalty
  3. Innovation-perhaps the key to much higher stock prices is when there is more mass adoption of self-driving cars-public not yet ready, but we can say Tesla will be at the forefront when they are.
  4. Performance

Technicals

Looking at the Daily Chart, the last major swing low was at 152.37 made on April 27, 2023.

More recently, Tesla had a reversal bottom low at 160.76.

Typically, once a strong reversal bottom is made, that could be a bottom UNLESS that price is violated.

We see 180 pivotal and can attract buyers especially with the short float.

Over 180, we would think it looks good for an active investment-maybe a move to 215 area.

Should 160.76 fail then we have a $145-150 target in mind. That is the 80-month moving average or 6–7-year business cycle support.

However, we would want to see evidence of strength at that level since 100-110 is not out of the question.

I also appeared with Charles Payne on Making Money with Charles Payne-that clip is below.

ETF Summary

  • S&P 500 (SPY) 520 now resistance
  • Russell 2000 (IWM) 201 support and then after that is 185
  • Dow (DIA) 385 support 400 resistance
  • Nasdaq (QQQ) 440 the pivotal area
  • Regional banks (KRE) 45-50 range
  • Semiconductors (SMH) 223 support near term
  • Transportation (IYT) 68 area support
  • Biotechnology (IBB) 135 pivotal
  • Retail (XRT) 75 support
  • iShares iBoxx Hi Yd Cor Bond ETF (HYG) 76.50 support and back over 77 better

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