Tesla (TSLA) – Get a free report Stock can’t find brake system.
Stocks opened 4.6% lower on Tuesday, the first session of a holiday shortening trading week and the final trading week of 2022.
Shares of the electric vehicle leader at the last check fell 8%. If Tesla stock closes lower for the day, it would mark the seventh consecutive daily drop and the 10th daily drop in the past 11 trading sessions.
This time, the decline comes as the automaker has a plan maintain lower production at the factory in Shanghai in January.
Reports of a fall in output in Shanghai in December had previously hit stocks and that remained a negative catalyst to start the week.
The drop has investors questioning how low Tesla stock can go.
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Weekly chart of Tesla stock.
Chart courtesy of TrendSpider.com
Honestly, I would expect a better position than the bulls in the $150 area. Some of the main measures are in this area, but instead We saw an intentional incident in stock prices.
Tesla stock has since continued to fall and is approaching the next area of interest.
I am eyeing the $100 to $110 area. In that zone, we have a breakout zone of less than $150, but a breakout zone nonetheless.
Furthermore, that’s also where we find the 78.6% and 10-year retracement moving average.
Now, this is not my typical measure. I have more confidence in the 10-day or 10-week moving averages and more confidence in the 50% and 61.8% retracement levels.
That is not to say that the current measures are insignificant. Just like that volatility trending higher, and so even if those measures act as support, such an attempt could be accompanied by heightened emotions and intense price swings.
Keep in mind that Tesla’s pre-covid high has dropped to nearly $65. While many other great companies are near or have tested pre-covid highs, Tesla is still up 76% from this level even then fall 72% more than its all-time high.
It’s not yet clear where Tesla stock will bottom out. The stock is currently in a free fall.
Selling at a tax loss will slow after December 28, so perhaps that will help the stock find a buy price.
In any case, once the stock does bottomI think some areas — like $150 to $160 — will become resistance.
