Tesla Stock Drops After Earnings Miss as Musk Warns of 'Rough Quarters' Ahead—Watch These Levels
key Takeaways
- Tesla shares tumbled in extended trading Wednesday after the EV maker’s quarterly results fell short of Wall Street’s expectations and CEO Elon Musk warned of a “few rough quarters” ahead.
- The stock recently encountered resistance near the upper trendline of a symmetrical triangle ahead of the EV maker’s quarterly report.
- Investors should watch crucial support levels on Tesla’s chart around $292, $265 and $225, while also monitoring an overhead area near $365.
Tesla (TSLA) shares dropped in extended trading Wednesday after the EV maker’s quarterly results fell short of Wall Street’s expectations.
During the company’s earnings call, the shares continued to lose ground after CEO Elon Musk warned analysts of a “few rough quarters” ahead as federal incentives for EV manufacturers dry up. Earlier this month, President Donald Trump called for a review of subsidies awarded to Musk’s companies, including Tesla, raising concerns that the carmaker could face tougher regulatory scrutiny.
Through Wednesday’s close, Tesla shares traded 55% above their April low but had fallen 18% since the start of the year, driven down in part by a public feud between Musk and Trump over the president’s now-passed “One Big, Beautiful Bill,” which included a provision to eliminate the Biden-era $7,500 new EV tax credit.
Below, we take a closer look at Tesla’s chart and use technical analysis to point out price levels that investors will likely be watching.
Symmetrical Triangle in Focus
After setting their May high, Tesla shares have consolidated within a symmetrical triangle on declining trading volume. More recently, the price encountered resistance near the pattern’s upper trendline ahead of the EV maker’s quarterly report.
Selling looks set to accelerate on Thursday following the company’s results, with the price currently projected to open below both the closely watched 50- and 200-day moving averages. Tesla shares fell more than 4% in after-hours trading to around $318.
Let’s identify three crucial support levels to watch on Tesla’s chart and point out an overhead area worth monitoring during potential upswings.
Support Levels to Watch
The first lower level to watch sits around $292. This area, situated just below the symmetrical triangle’s lower trendline, could attract buying interest near several peaks and troughs on the chart between March and July.
Selling below this level could see the shares fall to support near $265. Investors may look for entry points in this area close to a trendline that connects a range of corresponding trading activity on the chart stretching back to last year’s prominent July swing high.
A breakdown below this level opens the door for the shares to revisit lower support around $225. The price would likely attract buyers’ attention in this location near the notable March and April troughs, which closely align with the late-August 2024 peak.
Overhead Area Worth Monitoring
During potential upswings in the stock, investors should closely monitor the $365 area. Those who have accumulated Tesla shares during the formation of the symmetrical triangle could look for profit-taking opportunities near the top of the pattern and the mid-February countertrend high.
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