- The Tesla Rally is starting to run out of charge.
- Stock markets are turning around and TSLA is a high beta stock.
- TSLA is poised to trade below $300 by the end of the week.
Tesla Stock (TSLA) lost ground on Monday as the recent rally in stocks began to lose steam, and as a result most tech and mega-cap names lost ground. Tesla was no slouch and ended the week losing 1.1% but has already doubled on the first day of the new week.
Concerns over what the Fed might say at the upcoming Jackson Hole symposium led to parking risk assets for now as yields have increased slightly. Fed funds futures also changed in price with a slightly higher probability of another 75 basis point rise in September.
Read also: Tesla Stock Deep Dive: Price Target at $400 on China Headwinds, Margin Squeeze, Drop in Shipments
Tesla Stock News
For the moment, Tesla rolls by the broader macroeconomic environment. Yes, there have been conflicting reports of price hikes for the FSD as a potential headwind, but reduced delivery times for the Y-model are positive. All in all, most of this is just noise in the current environment. It is the momentum and the technical image that are at the center of current concerns.
Tesla Stock Forecast
Tesla has now drawn a neat double top in the table from August 4 to August 16. Both sessions saw TSLA Stock failing at the $945 resistance level. Double tops are technically negative. The target is the valley at the top ($840 to $945) and is triggered on a breakout of the valley. This gives a technical target of $735.
For the moment, this corresponds to fundamental picture of a fading equity rally and risk aversion sentiment. Technically, the move won’t trigger until $840 (the valley) is broken. $840 to $735 is also where we can see a volume gap, meaning less price acceptance allows the stock to easily move through this area. The bearish divergence on these double tops adds to the bearish view. The Relative Strength Index (RSI) trended lower from August 4-16.
Don’t forget the Tesla 3 for 1 stock split August 25 means Tesla will be trading somewhere below $300.
Tesla Daily Chart (TSLA)
The author is short Tesla.