Tesla released its Q3 earnings yesterday, which were weak and included downbeat comments from CEO Elon Musk. Company adjusted EPS was 66c with disappointing gross margins (excluding regulatory credit sales) of 16.3%. This was lower than the Wall Street estimate of 70c and 17.5% respectively. Operating margin was 7.6%, almost 10% lower than 2022's comparable.
Tesla's price cutting is largely to blame, with Musk commenting on the high-rate environment, saying "I can't emphasize this enough … the vast majority of people buying a car is about the monthly payment."
The poor results have had technical implications.
Weekly Chart Breakdown
- Yesterday, we referenced the coil or symmetrical triangle that defined Tesla's weekly chart.
- Following the results release, TSLA.us stock opened over 7% down today.
- This has resulted in a breakdown from the symmetrical triangle.
- Tesla's green 5-week EMA is looking to cross below its orange 10-week EMA.
- If successful, this will put the weekly EMAs into a bearish formation.
- Moreover, the weekly RSI has dipped below 50 (green rectangle).
- If it sustains on this side of the RSI, there is likely to be an underlying bearish momentum which will act against Tesla's price.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.