Tesla stock has recently seen a slight decline, leaving investors puzzled as to the cause behind it. However, the answer may be simpler than expected: taxes.
In early Tuesday trading, Tesla stock was priced at $233.55, experiencing a decrease of $6.90 or 2.9%. Meanwhile, both the S&P 500 and Nasdaq Composite have also experienced a decrease of about 0.4%.
Over the past eight days, shares of the leading electric-vehicle manufacturer have faced a decline, resulting in a loss of approximately 6% since the beginning of 2024, according to Dow Jones Market Data. During the same time frame, the Nasdaq has also slipped by about 1.5%.
Despite Tesla delivering an impressive 485,000 cars in the fourth quarter, surpassing expectations, the stock has remained weak. This marked an increase from the approximately 405,000 cars delivered in the fourth quarter of 2022.
Katie Stockton, the founder of Fairlead Strategies and a renowned market technician, points out that Tesla's stock has experienced a pullback above its rising 200-day moving average. Currently, it is categorized as being short-term oversold with neutral intermediate-term momentum.
Market technicians rely on stock charts to gauge investor sentiment and make predictions about future stock movements in the short- and medium-term. The oversold label indicates that a stock has dropped more than anticipated due to negative news, suggesting that a rebound may be imminent.
In conclusion, despite some short-term challenges for Tesla stock, including potential tax implications and rumors in the news, the company's record-breaking fourth quarter suggests a positive outlook for the future. Investors may want to consider these factors before making any hasty decisions.
Profit-Taking Signals a New Year for Tesla Stock
The year 2023 proved to be a remarkable one for Tesla, with its stock value more than doubling. Now, as the new year commences, investors are taking advantage of profit-taking strategies. By selling their stock early in the year, they can delay paying capital-gains taxes until the next tax cycle, avoiding immediate financial obligations.
Maintaining momentum is essential for stock traders, who track trends closely. Typically, stocks that are on the rise tend to continue climbing, while those in decline may struggle further. In this case, momentum remains steady, with no significant shifts expected. Alyssa Stockton, a renowned stock trader, believes that the current uptrend will persist. She notes that the resistance level stands at roughly $260 initially and emphasizes the importance of Tesla's ability to stay above the 200-day moving average.
Presently, the 200-day moving average sits at approximately $231 per share. Given that Tesla's stock remains above this threshold, Stockton believes resistance levels may become an obstacle when the current trend eventually reverses.
The upcoming fourth-quarter earnings report on Jan. 24 will serve as a crucial data point for Tesla shareholders. According to FactSet estimates, Wall Street anticipates earnings per share to be around 72 cents, a decline from the $1.19 reported during the same period in 2022. While Tesla has encountered increased sales during the fourth quarter, price reductions have taken a toll on profit margins. Consequently, any insights provided by Elon Musk regarding pricing or electric vehicle (EV) demand will likely outshine the headline numbers released by his company.
In conclusion, Tesla investors are harnessing profit-taking strategies to kickstart the new year. Despite uncertainties in economic conditions, maintaining momentum is key for stock traders and Tesla's ongoing success. The fourth-quarter earnings report will shed light on the company's financial performance and the market's reaction to Tesla's pricing and EV demand outlook.