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Tesla Stock Is Trading Near Its 52-Week Low: What’s Next?

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Dec. 4 2020, Updated 10:52 a.m. ET

Tesla stock

In the week ended October 5, Tesla stock (TSLA) fell 1.1% after tanking 11.5% in the previous week. In the third quarter, Tesla fell 22.8% after gaining 28.9% in the second quarter. As of October 8, Tesla has fallen 5.4% MTD (month-to-date).

Auto stocks (XLY) General Motors (GM) and Ford (F) have risen 1.7% and 0.1% MTD, respectively, while Fiat Chrysler (FCAU) has fallen 2% in the same period.

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Weekly technical outlook

On October 8, Tesla stock settled at $250.56, its lowest in the last six months. That was not very far from its 52-week low of $244.59. In the coming few sessions, $244.59 should act as an immediate support level, followed by stiff support near $236.

Its 14-day RSI (relative strength index) was below the line of equilibrium at 36.2, reflecting a negative bias in momentum. An immediate resistance in Tesla stock is near the $264 price level, followed by a key resistance near $277.

The stock was well below its 50-day SMA (simple moving average), which was near $308.40, suggesting a weakness in the price trend.

Recent updates

The last couple of weeks have been hectic for Tesla’s CEO Elon Musk. On October 1, news of a settlement between Musk and the SEC (Securities and Exchange Commission) fueled a sharp recovery in TSLA stock. According to the settlement, “Tesla Inc and Elon Musk have agreed to pay $20 million each to financial regulators and the billionaire will step down as the company’s chairman but remain as chief executive,” Reuters reported on September 30.

However, those gains didn’t last long. On October 4, Musk, in a series of tweets, mocked the SEC, calling it “the Shortseller Enrichment Commission.” Musk’s tweet surprisingly came hours after a federal judge ordered Musk and the SEC “to justify their securities fraud settlement.”

Overall, Tesla’s vehicle deliveries and production have improved significantly in the last couple of quarters. But a federal court’s approval of the deal between Musk and the SEC is critical for a sustainable recovery in TSLA stock in the near term.

In the next part, we’ll see how Ferrari stock has traded so far in October.

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