Tesla stock is holding the key psychological level of $200 ahead of the crucial PCE inflation data release on Thursday. The US equities are showing signs of weakness as the PCE numbers are the Fed's preferred gauge to measure inflation and plan its monetary policies accordingly.
After Monday's sell-off in the stock market, the S&P 500 index has been trading sideways this week. The market participants are waiting for the critical data release to take more positions. This is also evident from the decreased trading volume in the major equities. The Nasdaq 100 index is also looking weak, with a 96-point drop on Wednesday.
The global EV industry has taken a significant hit in the last couple of months. The stocks of once the industry heartthrobs like Polestar, Lucid, and Rivian are trading at historic lows. Tesla stock is also experiencing a significant downtrend after releasing underwhelming earnings reports in the last two quarters.
The downtrend in the shares of electric car manufacturers comes at a time when the benchmark indices of the US stock market have recently posted record highs. In its Q4 earnings, Tesla Inc. reported $25.2 billion in sales, missing the market expectations of $25.6 billion. Another bearish behind the bearishness is the squeezed margins due to Tesla price cuts in multiple jurisdictions.
If we analyze NASDAQ: TSLA on a daily timeframe, the stock shows signs of a bullish reversal. This is due to the bullish divergences on the RSI and MFI indicators. The recent higher high on the daily timeframe backs this outlook.
However, this Tesla price prediction will stand invalidated in case of a breakdown below $186 support level. Until then, a retest of the $211 resistance seems to be the most likely scenario for the coming weeks. This will be a 4.5% increase from the current price level.
The above-mentioned support and resistance levels are visible on the following chart with the current state of the Relative Strength Index and Money Flow Index indicators.
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