Tesla shares are still trading on a downtrend, although the selloff has been less sharp these days. Price has made a strong bounce off the near-term support around $185/share and pulled up to the moving average dynamic resistance on its daily time frame.
The EMA might continue to keep gains in check as this lines up with the descending triangle top on the same time frame. Aside from that, stochastic is already indicating overbought conditions, which means that the selloff is bound to resume. If so, Tesla shares could fall back to the previous lows or probably create new ones.
Tesla Shares Forecast
Demand for electric cars has considerably weakened after energy prices steadily declined since last year. This has led to projections of lower revenue for Tesla for the previous quarter and a selloff in Tesla shares.
Weaker sentiment for the US economy due to the weak NFP reading for March could also weigh on US equities. Retail sales and manufacturing data have also been short of expectations, adding signs that the Fed might sit tight and refrain from adjusting monetary policy this year.
However, a strong surge in risk appetite could still lift Tesla shares past the moving average resistance. If so, price could climb up to the next ceiling at $230/share, which lines up with an area of interest and former support. A move past this area could lead to a test of the $250/share resistance level.
The company is set to release its earnings report on May 5 and weak projections could weigh on the stock price until that date. Investors are also concerned that CEO Elon Musk and his team are unlikely to secure enough funding to continue their development of the company’s battery factory. One of the more important numbers to watch out for is the company’s cash flow for the first quarter of this year.
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