Tesla Share Price Set For a Parabolic Dive After Earnings

The Tesla share price has been in a consolidation phase as investors refocus on the upcoming quarterly results. TSLA stock is trading at $720, which is a few points above the year-to-date low of $615. This price is also substantially lower than its all-time high of above $1,200. Tesla’s market valuation has retreated to about $746 billion.

Tesla earnings ahead

The Tesla stock price has been relatively calm in the past few days as investors wait for the upcoming earnings. The firm will publish its results on Wednesday of this week. Analysts polled by Reuters expect that Tesla’s revenue dropped to over $17 billion in the second quarter from the previous $18 billion. 

This decline will be because of the company’s challenges in China, a country that locked down in Q2. Indeed, recent figures showed that the company’s deliveries to China crashed by about 18% because of these challenges.

Tesla’s profit is also expected to drop to about $1.88 per share, down from the previous quarter’s increase of $3.22. This trend will be because of the rising cost of doing business and the fact that Tesla is one of the biggest holders of Bitcoin in the world. Bitcoin price declined sharply during the second quarter. Historically, Tesla has a good track record of beating analysts’ estimates.

Tesla share price has also consolidated because of the ongoing issues surrounding Elon Musk’s acquisition of Twitter. Analysts believe that Musk will be compelled to acquire the company as long as banks are ready to provide financing. Besides, Musk willingly decided to launch a bid for a company that was not on sale. Therefore, Musk’s acquisition of Twitter is seen as a bearish thing for the TSLA stock price.

Tesla share price forecast

My last few articles on TSLA stock price have been a bit bearish. In fact, I have warned that the stock will likely drop to about $500 in the next few months. Turning to the daily chart, we see that Tesla shares have crashed below the 25-day and 50-day moving averages. 

The stock has also formed a bearish pennant pattern that is shown in blue. This is usually one of the most bearish patterns in price action analysis. Tesla share price also formed a triple top pattern. Therefore, the stock will likely have a bearish breakout as sellers target the key support at $600. A move above the resistance at $770 will invalidate the bearish view.

Tesla share price