Technical Update - Tesla breaking key support. More troubles ahead for the beaten down share price Technical Update - Tesla breaking key support. More troubles ahead for the beaten down share price Technical Update - Tesla breaking key support. More troubles ahead for the beaten down share price

Technical Update - Tesla breaking key support. More troubles ahead for the beaten down share price

KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  Tesla shares have been sold off heavily closing yesterday below key support at 110. No one wants Tesla on their books at year end possibly leading bottoms fishers trying to pick up the beaten down share. However, indicators point to lower levels and Tesla could drop to even further in 2023.


Tesla closed yesterday below support at around $110. A level mentioned in previous Technical Updates that Tesla was likely to reach.

The 110 support level is the lowest level of the consolidation area back from Q3-Q4 2020. Next support is at around $91 but that might not hold either.
Tesla is a stock few Fund Managers want to have on their books at the end of 2022. Bargain hunters might try to pick up the beaten down stock which could lift Tesla share price somewhat in the first few days of the new year. 
But a correction might be short-lived and there is likely to be more down side for Tesla investors in 2023.

Down trend and no RSI divergence on daily, weekly and monthly time periods. RSI is currently below 40 i.e., in negative sentiment on all time periods indicating lower levels are likely both short- and medium term. Tesla dropping to 64 and possibly even lower in 2023 seems more and more likely.
In a Technical Update from November I explain why https://www.home.saxo/content/articles/equities/ta-tesla-bubble-imploding-22112022
Tesla is a bubble that is imploding and when that occurs the price can drop all the way down to the base. The base is the price area where a stock was trading before it took off. The base price area for Tesla is between 20 and 30. If Tesla drops below 64 next year that scenario could unfold. 
Bottom fishing can be costly and one needs to keep it stops tight. However, there will be corrections when new money comes in to the market and sudden upward corrections of 5-10% could be seen. But as mentioned trend is down and selling is likely to resume pushing Tesla to above mentioned levels. 

 

All charts and data : Saxo Group

RSI divergence explained: When  price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend


Author is holding a short position in Tesla
Disclaimer

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.