Tesla Motors (TSLA) traded 6% lower on Thursday morning, after CEO Elon Musk in a conference call with analysts hesitated in questions, which may have enhanced uncertainty.
Tesla beat Wall Street expectations for revenue and profit. The company reported earnings per share of ($3.35) and total revenue of 3.4 billion, compared to analyst estimates of ($3.53) and $3.27 billion.
In Q1, Tesla burnt through $1 billion, but Elon Musk began the call by outlining improvements to the company’s cash flow statement. Yet, on multiple occasions, he berated questions about cash flow, implying that they were boring. The call has been referred to as bizarre.
“I think that if people are concerned about volatility, they should definitely not buy our stock,” exclaimed Musk. “I’m not here to convince you to buy our stock. Do not buy it if volatility is scary.” However, the questions focused on financial analysis rather than stock volatility.
Our analysis of the TSLA chart below shows a negative channel in which the stock is trading. This projects down to $220. The stock is now trading in the rising phase of its current market cycle. But it is also significant that it failed in a resistance zone and is moving sharply lower post earnings.
The current cycle will end in the Aug-Sep period. However, there is also an out of phase cycle that ends in June, along with many other stocks.
You may consider keeping those periods in mind, while trading or investing in this stock. These periods offer the highest risk, when stocks tend to accelerate to the downside. For an introduction to cycle analysis, check out our Stock Market Cycles video.
Tesla Motors (TSLA) Stock Chart with Weekly Bars
Twitter: @askslim
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
