Earnings Play: Tesla

Look for a bounce off of the 50-day SMA, if that fails, be very cautious.

Tech (1)

Today, after market, Tesla (TSLA) is anticipated to report third quarter EPS of $0.55 compared to $0.37 a year ago on revenue of approximately $8.3 billion vs. $6.3 billion last year. The company manufactures electric-vehicles and its expected move based on front-month options is 7.7%. The last time the company reported earnings the stock dropped 5.0%.

Looking at a daily chart, Tesla's stock price recently broke out to the upside of a short-term symmetrical triangle pattern that began to form in early-September. The RSI calls for caution as it is currently holding just above 50. A symmetrical triangle is considered to be a continuation pattern and Tesla has been in a strong uptrend since mid-March, therefore the bias remains bullish. Tesla's stock price will likely bounce off of the 50-day simple moving average (SMA) and advance to retest the all-time high of 502.00 and change. If price can breakout above the record high, than the next two targets would be 620.00 and 682.00. With that being said investors and traders should be very cautious because if Tesla closes below its 50-day SMA, it would be a very bearish signal. The last time that Tesla's stock price closed below its 50-day SMA, price dropped roughly 40% in 7 trading days. Given the RSI reading and how Tesla appears to only use a SMA as support for roughly 2 bounces, their is a chance that Tesla could break down, and if it does, price does not have strong support until 330.00.    

Source: GAIN Capital, TradingView

More from Earnings


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.