Tesla: The Steep Decline Is Just Getting Started

Jun. 24, 2022 2:56 PM ETTesla, Inc. (TSLA)373 Comments

Summary

  • This is a dedicated price action analysis on Tesla stock. Despite its recent bear trap, we noted that TSLA has failed to regain its bullish momentum.
  • The twin double top bull traps have significantly impeded the recovery of its bullish bias. As such, we urge investors to be very cautious here.
  • Our reverse cash flow model indicates that Tesla would find it increasingly challenging to justify its valuation if the market is not supportive of its premium.
  • Therefore, we revise our rating from Buy to Hold. We urge investors to await a successful re-test of its revised near-term support of $540 before considering adding exposure.
  • I do much more than just articles at Ultimate Growth Investing: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

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Price Action Thesis

We follow up with a detailed price action analysis on Tesla, Inc. (NASDAQ:TSLA) stock as there have been significant developments over the past month.

We re-rated TSLA to Buy in May after

TSLA price chart (monthly)

TSLA price chart (monthly) (TradingView)

TSLA price chart (weekly)

TSLA price chart (weekly) (TradingView)

TSLA valuation metrics

TSLA valuation metrics (TIKR)

Tesla revenue change % and adjusted EBIT change % consensus estimates

Tesla revenue change % and adjusted EBIT change % consensus estimates (S&P Cap IQ)

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Disclosure: I/we have a beneficial long position in the shares of TSLA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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