Tesla, Inc. (TSLA) shares fell more than 2% during Monday's session amid signs of a sales slowdown. According to the Dominion Cross-Sell Report, there were just 6,252 new registrations in the 23 states covered by the report compared with 23,310 in January. The figures don't include the introduction of a $35,000 version of the Model 3 sedan, while January's figures were boosted by the expiration of the tax credit.
RBC Capital reiterated its Underperform rating on Tesla shares and slashed its price target from $245 to $210 per share – a 20% discount to the current market price. The firm cut its first quarter Model 3 delivery forecast from 57,000 to 52,500 but left its 2020 forecast of 347,500 vehicles unchanged. Last week, Cowen & Co. analysts also cut their price target from $200 to $180 and reiterated their Underperform rating.
From a technical standpoint, Tesla stock broke down from reaction lows to test the low end of its medium-term price channels and long-term support trendline. The relative strength index (RSI) moved closer to oversold territory with a reading of 34.51, but the moving average convergence divergence (MACD) continues to trend lower. These indicators suggest that the stock could have more room to the downside.
Traders should watch for a rebound from trendline support levels toward reaction highs of around $275.00 or upper trendline resistance near the 50-day moving average of $299.71. A further breakout from these levels could lead to prior highs of around $380.00, but that scenario appears less likely to occur. If the stock breaks down from these levels and long-term support, traders could see a significant move lower toward lows of around $180.00 made back in late 2016.
The author holds no position in the stock(s) mentioned except through passively managed index funds.