Goldman Sachs Remains Bearish on Tesla


Mar. 21 2018, Updated 9:01 a.m. ET

Tesla stock

Last week, Tesla (TSLA) stock continued to trade on a negative note and ended the week with a fall of 1.8% against the 1.2% fall in the S&P 500 Index. In the previous week, the stock fell 2.4%.

Tesla began 2018 on a positive note and jumped 13.8% in January 2018. However, these gains couldn’t sustain in February as the company revealed that its Model 3 production ramp-up had been slower than expected. In February, TSLA traded on a negative note and ended the month at a fall of 3.2%. Last month, other auto stocks (FXD) General Motors (GM), Ford Motor Company (F), and Fiat Chrysler Automobiles (FCAU) fell 7.2%, 3.3%, and 3.2%, respectively.

Read March 2018 Update: Is the Market Losing Hope in Tesla? to learn about recent updates on Tesla.

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Goldman Sachs’s bearish views

According to a recent CNBC report, Goldman Sachs analyst David Tamberrino is still recommending a “sell” on Tesla stock, as he expects the Model 3’s ramp-up to be slow.

Last month, Tesla halted its Model 3 production from February 20 to February 24. This move was targeted at boosting the vehicle’s production rate by adjusting the automated equipment at Tesla’s Fremont-based facility and Nevada-based Gigafactory.

In 4Q17, Tesla delivered ~30,000 total vehicle units to its customers, which included 1,542 units of the Model 3. During Tesla’s 4Q17 earnings conference call, its management reiterated its target of achieving a Model 3 production rate of 2,500 units per week in 1Q18.

Key technical levels

On March 16, Tesla stock was trading at $321.35. The stock’s 14-day RSI (relative strength index) indicator fell below the line of equilibrium to 42.3, reflecting underlying weakness in its momentum. An immediate resistance level exists near $322, and only a violation of this level could attract fresh buying. On the downside, no major support level lies above $298.

Read on to the next article to learn about Ferrari’s performance in the second week of March 2018.


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