Tesla’s share price has fallen towards the $700.00 level and subsequently recovered by $100.00 already, due to a massive drop in the global stock market over the Ukraine situation.
Many news outlets have been quick to point out that Elon Musk’s net worth has dropped below $200 billion on the plunge, however, the Tesla CEO did cash out many of his company shares when Tesla was near an all-time high last year.
Tesla’s share price is also likely to be temporarily under pressure, after the Securities and Exchange Commission is reportedly looking into whether recent stock sales by Tesla CEO Elon Musk and his brother Kimbal Musk potentially violated insider trading rules.
The investigation began late last year after Musk and his brother sold $108 million worth of Tesla shares, according to the media sources familiar with the story.
That sale reportedly happened the day before Elon Musk polled his Twitter followers about whether he should sell 10 percent of his stake in the company and promised to abide by the poll’s results.
Wall Street also have to factor in a number of other fundamental factors, aside from the inside trading story. A rotation into bank stocks overcoming rate hikes could hurt tech or car stocks, plus Ukraine and possibly Taiwan fears could easily weigh heavily on Tesla’s share price. China is a major market for Tesla.
Overall, I am not bearish towards Tesla’s stock price, I think a major low could be in, however, we could see some temporary range trading between $700.00 and $900.00 for a while.
Tesla Short-term Technical Analysis
According to the four-hour time frame, Tesla’s share price could be forming a large, inverted head and shoulders pattern, although it is in the very early stages.
Looking at the overall size of the potential inverted head and shoulders pattern, it holds an initial target of $300.00, however, this seems unlikely to have soon, and a move back towards $900.00 seems more likely.
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Tesla Medium-term Technical Analysis
According to the daily time frame Tesla’s stock price has totally reversed all forms of negative MACD price divergence, which is very encouraging.
The overall break to the $700.00 level and bounce is mildly bullish, and we are seeing a test of the 200-day moving average, close to the $800.00 level.
In the medium-term a massive, inverted head and shoulders pattern could form, however, I suspect it will take months to form.
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