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Tesla indicators show TSLA stock is a sell short-term after the split

Tesla indicators show TSLA stock is a sell short-term after the split
Dino Kurbegovic

Tesla (NASDAQ: TSLA) shares started off their post-split trading on a high note as the shares jumped over 2% immediately after the stock split, on August 25. Furthermore, the stock seems to be getting a boost from the recent legislation passed in Congress through the Inflation Reduction Act. 

Additionally, the firm and its charismatic CEO, Elon Musk, stated that they’re aiming to get self-driving cars ready by the end of this year, with 1,000 people receiving the ‘self-driving beta’ version with potentially another 10,000 people being added to the beta if no issues are seen in the smaller test.

Despite the apparently positive news surrounding Tesla, technical indicators for the stock, after its split, have not been kind. Namely, the momentum indicators and the short-term moving average indicators all point to the stock being a ‘sell’. 

Technical analysis TSLA summary. Source: TradingView

TSLA chart and analysis 

However, looking at the yearly performance, TSLA did better than 94% of all other stocks. In the last month, TSLA has been trading in a wide range between $279.35 and $314.67, with the technical analysis indicating that a support line is at $284.81 and a resistance line at $290.32.

TSLA 20-50-200 SMA lines chart. Source. data. See more stocks here.

With the pullback in price taking place, a possible opportunity for entry could present itself as there seems to be little resistance above the current price; traders could look at placing a stop loss below the above-mentioned support line if looking to initiate a short-term long position

TipRanks analysts rate the shares a ‘moderate buy,’ seeing the average price in the next 12 months reaching $314.58, 10.45% higher than the current trading price of $284.82.

Wall Street analysts’ price targets for TSLA. Source: TipRanks  

Therefore, the general analyst rating remains a buy for TSLA, with 19 of the 30 analysts having a buy rating, while 5 have a hold and 6 a sell rating. 

General analyst rating. Source: TradingView 

Price target

With the shares now trading at ⅓ of their previous price due to the three-for-one stock split, analysts offer a wide range of price targets for the stock with the average settling at a possible 6.32% short-term gain, indicating that the stock price will most likely continue going up.  

Price target by analysts. Source: TradingView

In the end, investors need to be wary of broader macro trends that could ‘throw a wrench’ into the technical analysis and indicators, as they alone seldom predict the price action in a stock.

Having a broader macro view, coupled with the fundamentals, news, and finally, the technical side of a stock should offer the best possible return.  

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

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