Tesla Stock Dips as Investors Focus on Delivery Numbers Over Production Gains
Tesla shares experienced a notable decline amid volatile trading after delivery figures fell short of expectations, overshadowing the company's production growth.
Tesla, Inc. (TSLA) saw its shares fluctuate sharply, initially climbing about 6% in pre-market trading following the release of its second-quarter results. The electric vehicle manufacturer announced a significant 55% increase in production compared to the previous quarter, successfully hitting its target of producing 5,000 vehicles weekly. However, Model 3 deliveries reached only 18,440 units, missing analyst forecasts that ranged from 20,000 to 25,000. The company reported net reservations holding steady at approximately 420,000, with total deliveries to date standing at 28,386 vehicles.
Market experts remain split on whether Tesla can maintain its weekly production rate of 5,000 vehicles. Additionally, potential automotive tariffs proposed by the Trump administration pose a threat to Tesla’s stock performance, alongside other industry giants like General Motors Company (GM) and Ford Motor Company (F). The suggested 20% tariff on imported vehicles may trigger retaliatory actions from major international auto markets, potentially impacting domestic automakers. (Refer to: Trump's Tariffs Could Impact Nearly Every Sector of the Auto Industry: Moody's.)
Technically, Tesla's stock showed a bearish engulfing pattern and declined to pivot point support around $333.51 by midday Monday. The relative strength index (RSI) dropped to a neutral 51.39, while the moving average convergence divergence (MACD) indicated a bearish crossover in late June, maintaining a downtrend. These signals suggest potential further declines before the stock stabilizes, especially considering the elevated short interest currently affecting Tesla shares.
Investors should monitor key support levels, including the 200-day moving average near $322.33, a trendline support around $315.00, and the 50-day moving average at $309.57. A breakdown below these points could push the stock toward the lower trendline and S1 support close to $300. Conversely, a recovery from the pivot point might lead to retesting previous highs near $370 or resistance at the upper trendline and R1 level around $383.17. (See also: Tesla Declared a 'Real Car Company' by Musk After Meeting Crucial Production Milestone.)
Chart provided by StockCharts.com. The author does not hold any direct stock positions except through passively managed index funds.
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