TSLA stock could be in for a short-term selloff, as a reversal pattern can be seen on its 1-hour time frame. The stock has failed in its attempts to surge past the $280/share level and is on its way to test the neckline support at $250-260/share. A break below this level could confirm that further losses are possible.
TSLA stock has previously been weighed down by falling oil prices, as cheaper energy costs are dwindling demand for electric-powered cars. This has resulted to a sharp selloff in TSLA stock earlier in the year and this might take place again in the coming months due to Iran’s pledge to double its oil production.
However, stochastic is on the move up, hinting that further upside could be possible. If so, TSLA stock could move back up to the previous highs and possibly create new ones. RSI is on middle ground but is also climbing, suggesting potential rallies. On the other hand, the moving averages are making a downward crossover, which is an early signal of a reversal.
TSLA Stock Forecast
In addition to falling oil prices, the slowdown in China is also weighing on company prospects, as CEO Elon Musk has recently pointed out that the world’s second largest economy could be a major source of revenue. However, equity prices have been tumbling in the past weeks, leading to weaker financial confidence in the country.
The government’s official manufacturing and non-manufacturing PMI readings are up for release over the weekend and this could be crucial for TSLA stock since the numbers might affect overall consumer confidence. Weak data could further dampen demand for Tesla’s luxury vehicles, which might mean lower company profits down the line.
Tesla Motors is set to release its earnings report next week on August 5 and this might also determine the longer-term direction of its share prices.
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