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Here’s Why Tesla Stock Might Be Stuck in a Narrow Range

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Tesla stock

So far in this series, we’ve looked at key drivers for legacy auto stocks (IYK) General Motors (GM), Ford Motor (F), and Fiat Chrysler (FCAU). In this part, we’ll look at Tesla’s (TSLA) Wall Street performance.

Last week, Tesla stock traded on a slightly positive note, ending the week with a ~2.1% gain. In the previous week, the stock rose by just ~0.2%. Tesla stock’s volatility has reduced in the last couple of weeks.

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Technical analysis

Last week, Tesla stock retested its immediate resistance level of ~$356 but lacked the momentum to breach it. Its 14-day RSI (relative strength index) score is hovering near 54.9, suggesting some underlying momentum. The $333 mark should act as an immediate horizontal support for Tesla stock going forward.

Mixed fundamentals

In the second quarter, Tesla’s adjusted net EPS (earnings per share) were -$1.33, better than analysts’ estimated EPS of -$1.76.

Tesla’s 2Q17 car deliveries stood at 22,026 units, rising ~53% year-over-year but falling 12% quarter-over-quarter. As a result, the company was only able to meet the lower range of its guidance for the first half of 2017. Earlier this year, Tesla estimated that it would deliver 47,000–50,000 units in 1H17. It managed to deliver ~47,100 units during that period. A quarter-over-quarter drop in its vehicle deliveries may have kept investors’ sentiments mixed over the last couple of weeks.

Tesla is expected to start deliveries of its much-awaited Model 3 to non-employee customers in 4Q17. The company’s deliveries and production could remain in focus in the third quarter. In the next part, we’ll explore some possible reasons for Ferrari’s stock price doubling in 2017 so far.

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