Tesla Reports Latest Loss Below 2 Key Levels

Tesla, Inc. (TSLA) makes luxury electric automobiles, state-of-the-art batteries and solar panels for the home, and the stock has had a volatile ride so far in 2018. From its 2018 low of $244.48 set on April 2 to its 2018 high of $373.73 set on June 18, the stock had a bull market gain of 34.5%. This gain has been consolidated since the high with a bear market correction of 22.4% to Tuesday's close of $298.14.

Analysts expect Tesla to post a loss per share between $2.81 and $2.90 when the company reports quarterly results after the closing bell on Wednesday, Aug. 1. Value investors will not touch shares of Tesla with a 30-foot pole, but owners and potential buyers of Tesla vehicles will continue to their cult following for Tesla's CEO Elon Musk. His star has recently fallen somewhat, so it remains to be seen if he can produce some magic to get his stock off the mat. The key metric will be sales and guidance for the highly touted Model 3 as well as Musk's production guidance. (See also: Tesla May Need $10B Cash, Refinancing By 2020: GS.)

The daily chart for Tesla

The daily chart for Tesla shows a horizontal line at $341.84 that is my annual pivot, now a risky level. A pivot is like a magnet that has an 85% chance of being tested numerous times during its time horizon. As an annual level, it has been crossed many times between Jan. 11 and July 2. The two horizontal lines in the middle of the chart are my monthly and quarterly risky levels of $311.73 and $318.94, respectively. The lowest horizontal line is this week's value level of $266.17.

[Check out the Technical Analysis course on the Investopedia Academy to learn more about using stock chart analysis to develop a profitable trading strategy.]

The weekly chart for Tesla

The weekly chart for Tesla is negative, with the stock below its five-week modified moving average of $309.82. The stock remains above its 200-week simple moving average  at $259.65, and this "reversion to the mean" provided buying opportunities during the weeks of March 30 and April 6. The 12 x 3 x 3 weekly slow stochastic reading is projected to fall to 41.47, down from 47.72 on July 27.

Given these charts and analysis, investors should buy Tesla shares on weakness to the 200-week simple moving average at $259.65 and reduce holdings on strength to my monthly, quarterly and annual risky levels of $311.73, $318.94 and $341.84, respectively. (For more, see: Tesla Pulling Model 3 Workers From Other Projects.)