Tesla shares have been unable to confirm the double bottom reversal pattern on its daily chart, indicating that price is lacking upside momentum for a longer-term climb. The pair has bounced off resistance at the 50 simple moving average, which has held as a dynamic resistance level in the past.
Also, the 50 SMA has crossed below the 200 SMA recently, suggesting that a downtrend is underway. With that, Tesla shares could break below the previous lows near the $190/share level and could be in for more losses.
Tesla Shares Forecast
MACD is treading higher though, which means that Tesla shares might still have another chance at an upside break. In that case, price might test the 200 SMA resistance and consolidate around that area.
RSI, on the other hand, is moving lower, confirming the potential drop. If support at the $190/share level holds, Tesla shares could move sideways for the time being.
The FOMC minutes failed to trigger a strong directional move for this stock, although US equities have mostly ended lower after the report was released. As it turns out, policymakers weren’t as hawkish as many had expected, with some expressing concerns about hiking rates too soon.
The minutes also revealed that policymakers are getting more concerned about international risks stemming from the economic slowdown in China, the financial uncertainty in Greece, and the tension in the Middle East and Russia. This could weigh on risk sentiment, which might wind up dragging US equities lower.
In addition, Tesla is facing challenges from Apple, which is also reportedly working on its own electronic car. If this proves to be a success, Tesla shares could wind up trading lower in anticipation of weaker demand and sales of its own cars.
However, Tesla CEO Elon Musk announced that they are working on the development of home batteries. “We have the design done and it should start going into production probably about six months or so,” Musk said. “We probably got a date to have sort of product unveiling, it’s probably in the next month or two. It’s really great. I’m really excited about it.”
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