Tesla stock is being hammered
On May 20 at 1:55 PM EDT, Tesla (TSLA) stock was trading at $204.74, down 3.0% from its May 17 closing price. The stock posted a daily low of $195.25 this morning, which was its lowest level since December 2016.
Tesla’s losses came after analysts at Wedbush Securities significantly cut their price target on its stock to $230 from $275. Wedbush raised concerns about the potential of falling Model 3 sales in the US market.
Other key negative factors
Last week, in an email to employees, Tesla CEO Elon Musk said that Tesla needed to “examine every expenditure at Tesla, no matter how small,” Electrek reported. Musk called these cost-cutting measures “the only way for Tesla to become financially sustainable and succeed.”
Nearly all automakers try to cut unnecessary costs in order to improve profitability. However, Musk’s recent email to employees gave Tesla bears a chance to criticize the company by bringing attention to its deteriorating financial condition.
Key support levels in Tesla stock
This afternoon, Tesla stock rebounded from its daily low of $195.25, but it still was trading deep in the negative territory. No major support level lies above $181, raising the possibility that the stock could test this support level in the coming days.
The company’s 14-day RSI (relative strength index) is hovering near 25.8, within oversold territory. While an oversold RSI indicator level suggests the possibility of a technical bounce back in Tesla stock in the coming days, it reflects severe weakness in the stock’s price trend in the near to medium term.