How To Trade Tesla Stock Before And After Q3 Earnings – Tesla (NASDAQ:TSLA)
Tesla, Inc TSLA was trading flat on Wednesday as the company dives into its third-quarter earnings results after the close.
When Tesla posted mixed earnings for the second quarter on July 20, the stock rose nearly 10% the following day and continued to trade higher over the following 10 trading days before peaking at $313.61 on Aug. 4. Between that date and Wednesday, Tesla is down almost 30%.
For the second quarter, Tesla reported revenue of $16.93 billion, missing the consensus estimate of $17.39 billion. The company reported earnings per share of $2.27, beating a consensus estimate of $1.91. In the second quarter, deliveries totaled 254,695, up 27% year over year.
Analysts estimate that Tesla will average earnings per share of $1 on sales of $21.96 billion for the third quarter. Tesla reported Oct. 2 that it delivered 343,830 vehicles in the third quarter.
Ahead of the event, Wells Fargo analyst Colin Langan maintained an equal weight rating on Tesla and lowered the price target to $230 from $280.
From a technical analysis perspective, Tesla stock is looking bearish towards the event after settling into a possible bear flag pattern on the daily chart. It should be noted that holding stocks or options over a profit squeeze is akin to gambling, as stocks can be bullish on a profit miss and bearish on a profit decline.
The Tesla Chart: Tesla may have formed a bear flag pattern on the daily chart from September 29th, with the declining pole formed between that date and October 14th, and the upward sloping flag printed in subsequent trading days.
- If the stock suffers a bearish reaction to gains and breaks through the flag’s lower ascending trend line on above-average volume, the measured movement is around 27%, suggesting that Tesla could fall towards $166.
- If Tesla receives a bullish reaction to its earnings push, the brief uptrend that took place within the flag could continue. Tesla’s recent higher high within the uptrend was formed at $229.82 on Tuesday and the latest confirmed higher low was printed at $209.45 on Monday.
- If Tesla falls after releasing its earnings, the stock’s Relative Strength Index will fall into oversold territory, which could indicate a dip-buy opportunity for a rally.
- If the stock flies higher, a gap could fill between $257.50 and $262.47, with the top of the gap acting as resistance.
- Tesla has price history resistance above at $225.03 and $234.35 and support below at $213.13 and $200.51.
Also Read: Tesla Q3 Earnings Imminent. Can Nio foresee what is to come? What you should know before you print
Photo courtesy of Tesla.