After earnings, the stock had another awful day. Investors are well aware that may occur.
After the electric
vehicle manufacturer released quarterly results, shares fell for the third time
in a row. After the business released its 2023 first-quarter earnings, shares
fell 9.7%. After it released second-quarter results, shares unexpectedly fell by
the same percentage. Following the automaker's release of weak third-quarter
earnings on Wednesday, shares fell 9.3%, ending at $220.11.
Profit margins and pricing were essentially the issue. Operating profit margins dropped below 8%
as a result of price reduction, a drop of over 10% from the previous year. On
the company's conference call, Tesla CEO Elon Musk also sounded pessimistic,
complaining about how the economy is in rough waters and how high interest
rates are affecting demand.
Telsa may currently have a slight bounce, according to history. Shares have
recovered seven times, averaging 0.4% the day after a post-earnings decline.
Shares have increased by an average of 1.4% over the past week after the major
decline, adding practically one more percentage point to the Day One recovery.
There are a few
crucial levels for investors to follow, according to Frank Cappelleri, the
creator of CappThesis and a market technician. At the beginning of the year,
Tesla stock was trading at $290 per share. Technical traders keep an eye on
this level because it has lost Capelleri's 38% at $222. Traders look to buy
when a stock declines that much.