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Earnings Season Peak, Tesla Downtrend Continues

As investors continue harvesting earnings, Tesla TSLA stock’s future is uncertain as it declined once more on Monday. The shares have now fallen below a critical level that may portend further declines. The small blue bird is in for some interesting times with no senior board and disgruntled employees facing a high cost of living.

Following a terrible Friday, Tesla stock is struggling. The stock rose 0.7% at $208.90 to start the new week before dropping 5% to $197.08. The Dow Jones Industrial Average gained 1.3%, while the S&P 500 finished the day up 1%.

The key level is $200, the price at which the stock has held despite the electric vehicle pioneer experiencing a long list of issues, including weaker-than-expected third-quarter deliveries, additional delays at its Shanghai plant due to China’s zero-Covid policy, rising interest rates, weakening consumer demand, and price cuts—again in China.

The impact of the stock price on traders, who pay close attention to chart patterns and stock support levels, is just as important—or perhaps even more important—than the stock’s sheer durability. Traders hoping to capitalize on trends will be quick to react to any breakdown below a crucial level.

In the case of Tesla, a head-and-shoulders pattern—a stock chart that resembles a person shrugging their shoulders—is effectively over if the price of a share drops below $200. The stock is rising at the beginning of the pattern before declining—a shrug. The stock then creates the opposite shrug after the head is a new high. The stock may see a significant decline after the last shrug.

Stock Chart

Tesla Stock On A Downward Trend

Since the billionaire took over as owner and appointed himself as the CEO of the social networking platform in late October, confusion has ruled. He has reduced employment and engaged in conflict with well-known users like renowned author Stephen King. 

He also wants to make employees come into the workplace full-time and cancel their ability to work remotely. He also said that users would have to pay for the coveted blue tick, and suggested bringing back the long-gone video-sharing service Vine.

The volatility has had a significant impact on advertisers, who have reduced their spending.

Musk posted a conspiracy theory on the attack on Nancy Pelosi’s husband, Paul Pelosi, on Twitter before deleting it. And at 10:22 a.m. on Monday, Musk urged people to support Republican candidates in the midterm elections.

Shortly after the tweet, Tesla stock fell from almost $200 to as low as $197.11, with the market remaining unchanged. The market rose throughout the day, but Tesla stock ended the day close to its low.

Horror author Stephen King and NBA legend LeBron James and creator are among the notable individuals who have already indicated they are prepared to step down from their positions. Others have already left, including Shonda Rhimes, a scriptwriter.

Elon Musk appears to be mocking Mastodon, the alternative platform that many users have adopted in an effort to leave Twitter.

Tesla Stock Performance Over 5-year Period

Tesla Stock Performance Over 5-year Period

UK Rising Cost of Living

Retail sales declined in October as consumers’ cost of living increased. Many people appear to be holding off on purchasing, especially on larger purchases, as November Black Friday bargains are only around the corner. 

Due to the mild winter, consumers held off on purchasing winter clothing, which led to a fall in the sales of clothing and footwear, which witnessed higher sales this year. As consumers look for long-term cost reductions, energy-efficient gadgets like air fryers and electric blankets have continued to fly off the shelves.

Many people’s Christmas will arrive later than it did last year, and it might be less cheerful than usual as families struggle to make ends meet, especially if mortgage payments increase.

Earnings Releases Continue

In other news, the earnings season continues with energy, industrials, real estate, consumer discretionary, consumer staples, and healthcare companies expected to report results. 

Blended profits, which combine actual results with predictions from businesses that have yet to report, are still behind expectations from the quarter’s conclusion but gained ground last week.

Walt Disney Company (The)

On November 8, 2022, following the closing of the market, Walt Disney Company (The) is anticipated to announce earnings. The financial quarter covered by the report will expire in September 2022.  The consensus EPS expectation for the quarter is $0.5, based on projections from analysts. For the same period the previous year, there was a reported EPS of $0.37. 

Occidental Petroleum Corporation

The energy company, a chemical manufacturer and a carbon management leader will on November 8, 2022, following the closing of the market, expect to announce earnings. The financial quarter covered by the report will expire in September 2022. The consensus EPS expectation for the quarter is $2.48 based on projections from 9 analysts. For the same period the previous year, there was a reported EPS of $0.87. 

Constellation Energy Corporation

Constellation Brands Inc (STZ) is a global leader in producing and marketing beer, wine, and spirits, with operations in the United States, Mexico, New Zealand, and Italy. On November 8, 2022, prior to the market opening, the company is expected to release its earnings. The financial quarter covered by the report will expire in September 2022. According to analysts, the consensus EPS expectation for the quarter is $0.76.

More Midweek Earnings

Other companies expected on Wednesday to release earnings include TC Energy Corporation, Banco Santander Brasil SA, Manulife Financial Corp, Coupang, Inc., and Rivian Automotive, Inc. On Thursday vaccine manufacturer AstraZeneca PLC, Brookfield Asset Management Inc, and Becton, Dickinson & Company will also be keeping investors waiting.

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Author

  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.