Tesla, Inc. (TSLA) earnings take center stage on Wednesday evening, providing a long overdue reality check into the Model 3 rollout after months of flamboyant marketing by controversial CEO Elon Musk. It will be tough for quarterly metrics to live up to the hype, but shareholders are likely to forgive growing pains because it could be months or years before Wall Street analysts can gauge the long-term demand for the Model 3.

Tesla stock is not cheap by any stretch of the imagination, holding a higher market capitalization than rivals General Motors Company (GM) and Ford Motor Company (F). Even so, Tesla has attracted the type of euphoric coverage usually reserved for market icons like Apple Inc. (AAPL), speaking to a new generation in language often misunderstood by older demographics. Even so, high levels of skepticism are warranted due to the lack of actual sales in recent years. (See also: Opinion: Right Now, Tesla Is More Than Ever a Carmaker.)

TSLA Long-Term Chart (2010 – 2017)

The company came public at $19 in June 2010 and carved a short-term trading range between $15 and $30.50. The stock broke out in November, but buying pressure faded quickly, yielding broader range-bound action between the low $20s and mid-$30s. Those levels held in place for more than two years, ahead of a 2013 breakout that caught fire, drawing in a large supply of momentum capital.

The stock rose nearly fivefold between May and October 2013, carving one of the strongest uptrends of the current bull market cycle. The rally's trajectory eased when it neared $200, but continued buying pressure finally pierced that level in 2014, ahead of the September top at $291.42. That peak signaled the start of an intermediate correction that posted a two-year low at $141 in the first quarter of 2016, ahead of an April 2017 breakout and rally to $387 in June. (For more, see: The Case Against Tesla.)

The monthly stochastics oscillator ended a six-month sell cycle in November 2016, with a new buy cycle supporting the early 2017 breakout. The indicator hit the overbought level in June and has now crossed into a fresh sell cycle that predicts relative weakness for the rest of 2017. In turn, this raises the odds that the June rally high will also mark the 2017 high ahead of weaker performance into 2018.

TSLA Short-Term Chart (2015 – 2017)

July 2015 and April 2016 breakout attempts ran into aggressive selling pressure, while a slow-motion pullback into November 2016 improved the technical tone ahead of an April 2017 breakout that added about 100 points into June. The subsequent decline shook out a sizable population of weak hands, while the bounce into last week exhibited strong sidelined interest looking for relative bargains. (See also: Elon Musk Says He Might Be Bipolar.)

The early July decline into $302 marked the first test at new support generated by the April breakout. The stock has been sitting on the 50-day exponential moving average for the past two weeks, failing to bounce back to the rally high while signaling a holding pattern that should yield a sizable trend swing following this week's earnings report. Weekly and monthly cycles favor lower prices following the release, but it is really a toss-up given relatively narrow trading ranges in place since May.

Short-term levels generated by July price action should be watched for clues following the release. The July 5 gap established new resistance at $350 that held firm last week, triggering a reversal at $347. On the flip side, the July low at $303 marks the top of a breakout support zone between $280 and $300 that needs to hold at all costs to keep the long-term uptrend intact. (For more, see: Tesla's Model 3: Musk Warns of 'Manufacturing Hell'.)

The Bottom Line

Tesla entered a holding pattern after hitting an all-time high at $386.99 on June 23, while intermediate and long-term cycles have flipped from bullish to bearish. This cycle shift lowers the odds for a strong buy-the-news reaction following this week's earnings report, but downside remains limited given the solid technical tone. (For additional reading, check out: Tesla Stock Is at Risk of a Major Breakdown.)

(Disclosure: The author held no positions in the aforementioned securities at the time of publication.)

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