Earnings Play Tesla

Earnings Play: Tesla

Today, after market, Tesla (TSLA) is anticipated to report third quarter EPS of $0.55 compared to $0.37 a year ago on revenue of approximately $8.3 billion vs. $6.3 billion last year. The company manufactures electric-vehicles and its expected move based on front-month options is 7.7%. The last time the company reported earnings the stock dropped 5.0%.

Looking at a daily chart, Tesla's stock price recently broke out to the upside of a short-term symmetrical triangle pattern that began to form in early-September. The RSI calls for caution as it is currently holding just above 50. A symmetrical triangle is considered to be a continuation pattern and Tesla has been in a strong uptrend since mid-March, therefore the bias remains bullish. Tesla's stock price will likely bounce off of the 50-day simple moving average (SMA) and advance to retest the all-time high of 502.00 and change. If price can breakout above the record high, than the next two targets would be 620.00 and 682.00. With that being said investors and traders should be very cautious because if Tesla closes below its 50-day SMA, it would be a very bearish signal. The last time that Tesla's stock price closed below its 50-day SMA, price dropped roughly 40% in 7 trading days. Given the RSI reading and how Tesla appears to only use a SMA as support for roughly 2 bounces, their is a chance that Tesla could break down, and if it does, price does not have strong support until 330.00.

Source: GAIN Capital, TradingView

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.