Tesla Stock Price Forecast: $564 is a New Target

The Tesla stock price is down 1.76% on the day and has notched a 4th successive losing session as the company’s second-quarter vehicle delivery numbers face headwinds from China’s recent COVID lockdowns.

Brokerage firm Wedbush Securities estimates that the lockdowns implemented as part of a zero-COVID strategy have erased nearly 70,000 units of production this quarter after lockdowns in April and May severely dented the production capacity of EV companies. In April, CEO Elon Musk had given a guarded outlook, indicating that the company’s Shanghai production facility would either match the 1st quarter numbers or experience a shortfall.

One hundred thousand units have also cut global delivery outlook from the estimated 1.5 million to 1.6 million. However, Wedbush expects Tesla’s numbers to pick up in the 3rd quarter, culminating in an annual car delivery increase of 50% year on year.

Investors are expectedly banking profits made from the stock’s Q1 2022 surge, which peaked at 1149.41 on 4 April 2022. Since then, the Tesla stock price has steadily declined, with progressively lower highs pointing to weakening demand from investors.

Tesla Stock Price Forecast

The emerging bearish pennant on the daily chart portends danger for the bulls. Moreover, Thursday’s negative close has brought the price action closer to a test of the support posed by the pennant’s lower border.

A breakdown of this border and the 628.76 support will set the bears loose, targeting a measured move that aims for completion at the 502.28 support level (31 August 2020 high). The intervening support levels at the 600.00 psychological price mark (15 June 2021 low) and 564.57 (13 May 2021 low) must give way for the bears to arrive at the target. Below this point, the 466.59 pivot (14 October 2020 high) will form an additional milestone to the south. 

The pattern is invalidated if the bulls force a bounce on the pennant’s lower border, breaking the resistance barriers at 693.75 (29 June 2022 high) and 726.65 (2 August 2021 high). The latter is intersected by the pennant’s upper border, which will erase the break of the 726.65 resistance. This scenario will see the bulls push for additional upside targets at 779.23 (2 June 2022 high) and 828.50 (14 January 2021 high and 29 April 2022 low). 

Tesla: Daily Chart