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Tesla is Battered, Down 64% From the Top, Is the Bottom In?

December 19, 2022

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2:54 am

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50 comments

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Economics

Tesla TSLA weekly chart courtesy of StockCharts.Com

Tesla bounced off weekly support at the 220 level then quickly crashed strong support at the 180 level with nary a bounce.

Next support is the 140 level, then 100, then 60, then 23.

Tesla Monthly Support Levels

*Tesla TSLA monthly chart courtesy of StockCharts.Com*

At the monthly level, things look grim. If support at the 140 level breaks there’s a good chance the air pocket fills all the way to 40.

There is no strong support until the very long consolidation level between 10 and 25 with strongest support at 12.

Massive Collapse in Used Car Prices and Bankrupt Dealers Is Coming Right Up

Fundamentally speaking, auto sales in general are crashing and Musk has his hands full with huge losses on Twitter where he is devoting most of his time.

For discussion of auto sales, please see Massive Collapse in Used Car Prices and Bankrupt Dealers Is Coming Right Up

I suspect Tesla has a date with 60 if not 23.

I posted some Tesla charts back on January 27, 2022 in Observation of the Day: Somehow Elon Musk Nailed the Top

Elon Musk accidentally rang a bell. Did anyone hear it?

Since then, Tesla has moved towards the support levels I suggested. There has been a price split since then so if comparing charts look at the levels not the price at those levels.

Nasdaq 100 Weekly Support

*Nasdaq 100 Index weekly chart courtesy of StockCharts.Com*

Note that bounces happened at support levels right where one would expect bounces to happen.

This isn’t hindsight, I have been discussing these support levels since the beginning of the year.

Technically speaking, a retest of 10500 looks likely and there is no technical or fundamental reason to expect a bounce at that level to hold. There is even weaker support at the 10000 level.

Strong support is at the 6500 to 7500 level and I do suspect we will ultimately take back the entire Covid rally.

If so that would be a decline of 57 percent from the top, quite modest actually for a technology bear market.

But if the Index collapses to that level, many individual stocks will fall much further.

FaceBook – Meta Weekly Chart

*Meta weekly chart courtesy of StockCharts.Com*

Support does not also hold and in bear markets tends to break eventually. And in bear markets resistance is most often a kiss of death.

The opposite is true in bull markets where support almost always holds and resistance ultimately proves futile.

The biggest moves tend to come out of long consolidation patterns like the Tesla 2013-2019 consolidation.

Binance

Fundamentally speaking. I see no reason for the blast higher and thus no reason it it collapses back to eleven cents.

Bitcoin Weekly Chart

Bitcoin is currently in the middle of nowhere. It’s well above support at 10000 and consolidating a bit under resistance.

Several breakout attempts above 2000 failed and there is no fundamental or technical reason to expect a breakout here.

There is minor support around 15500 but there’s no reason to believe that level will hold if it’s touched again.

Collapse of FTX

The collapse of FTX is weighing on the entire crypto space.

For discussion, please see FTX US Declares Bankruptcy Too, What About the FTX Arena?

Also note Global Squabbles Erupt Around the World Over the Remaining Crypto Assets of FTX

Finally, Michael Saylor bet his entire company on Bitcoin, with borrowed money. He claims to be liquid down to a price level of $3,000 but some of us do not believe that level.

This is very important, if accurate,
and I bet on @Stimpyz1.

Technically, the next weekly support level is $10,000.

Guess what institutional buyers and hedge funds will do if price gets close:

1. Pull bids
2. Short to force Saylor over the brink

Smell Blood Anyone? https://t.co/zEu6JlmOt1 pic.twitter.com/UngoHTO24u

— Mike “Mish” Shedlock (@MishGEA) June 18, 2022

If Saylor is wiped out, I expect a big bounce in Bitcoin at that level. It will mark a short-term bottom.

For more on Saylor please see Laser-eyed Bitcoin Speculator Michael Saylor Blames Regulators for the plight he is in.

Liquidity Speaking

Overall liquidity is drying up, the Fed is committed to more hikes and it’s debatable if recession hits this year or next.

Interest rates have soared and housing transactions have crashed.

Fed and fiscal stimulus made these blowoff tops, and there is no reason to suspect the entire Fed-inspired rally will not ultimately be taken back in technology and crypto.

This post originated at MishTalk.Com

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JMesh

3 years ago

Tesla’s current PE (ttm) is 55. At 60 it would have a PE ratio of 18.5.

Six000mileyear

3 years ago

That was quick. Tesla is now in crash mode.

Billy

3 years ago

Anyone interested in buying an electric car I strongly suggest to do a lot of research before buying.

One of the biggest misunderstanding is the range. It’s recommended to charge before the battery gets below 20% and stop charging at 70%. If you go outside that range and always use fast chargers, then you battery could decrease it’s range by up to 20% within just 5 years.

So to maintain a battery for longevity, realistically any advertised range should be cut in half. If you drive fast, 80-100mph expect your range to decrease by 25%. Same with driving to the mountains. Elevation kills range.

Also before buying check out plugshare. They have an interactive map with public chargers. Chargers under 200kwh are pointless on a trip unless you don’t mind waiting more than an hour.

I find that EVs are wonderful as a daily driver and you own solar. You’ll need 10 x 350w panels to offset the average EV.

JackWebb

3 years ago

Reply to Billy

I’ve owned an EV for a decade.

– Yes on 20%, but no on 70%. You can fill to 100% without hurting the battery, as long as it’s not more than 90 or 95F and you get going right away. If you live in, say, the Southwest, you’d want to charge to less than 100% once it gets hot.

– Yes kinda on high speeds, but not too many people drive 80-100 mph. EV fuel economy sweet spot is about 45 mph. If they ever introduce a 2-speed transmission, i.e. overdrive, that will change.

– Elevation has no effect on range. What hurts range is driving uphill. Plenty of low elevation places with hills. Seattle, San Francisco, Pittsburgh, anyone? Towing hurts range, and so do winter temperatures.

– EVs aren’t good roadtrip vehicles. Too many recharges, too slow. I use a different vehicle for roadtrips. EVs are best in metro areas and for shorter trips in rural areas.

– There is NO connection between EVs and solar panels except in the “minds” of smug, virtue signaling progressives. Electrons are electrons no matter where they come from. Think of an EV as a heavy-duty appliance, like a heat pump, electric dryer, electric oven, or hot tub heater. In the real world, plug an EV into a standard 240v/32A circuit. This will run at 80% of the rating (240 x 32 x 0.8 = 6.14 kW.) At home, you’ll add about 6 kWh per hour of charging. A typical charge will be 50 kWh, meaning that if you discarge to 20% it’ll take 8 hours to recharge at home. Public chargers can be somewhat faster but there’s usually no point.

MarkraD

3 years ago

After watching Musk’s idiocy with TWTR, I think Tesla’s best hope is with him gone, it’s an investor confidence thing.

StukiMoi

3 years ago

Reply to MarkraD

Tesla is a one man clown show. Who else is going to take over circus duties, in order to keep the Fed welfare queens forking over to be part of the hype cult?

As a “car” company, they have, are and will, lose money on every unit for as long as they are around. But car sales to them, is just a marketing expenditure. Their business is selling paper to idiots enriched by Fed redistribution. To do that, you need one heck of a frontman. No matter whether the current one is replaced, or simply expires as a fashion-object-of-fascination; is rather irrelevant. No hype, means no paper sales, means cashcrunch. That’s been the deal at Tesla, since back when they had Teslagirls hawking roadsters to dotcom surviving OMD fans. There has never been any other deal. Nor will there be.

Unless Musk can gather up his dwindling HYPErpowers to convince some locality somewhere to gamble on properly lighting up a highway for an encore, this is the end. Doors uber OMD. Dragging around batteries for longer trips, were never more than a sophmore’s science project. Zero chance of scaling beyond the “it’s sorta neat” stage. And neither was the “Self driving” nonsense, unless; to keep the music playing; you keep ’em separated…. ‘Em being bots and humans.

Zardoz

3 years ago

Reply to StukiMoi

Do I assume you think their earnings statements are falsified, and therefore you get to make up any story that makes you feel special?

StukiMoi

3 years ago

Reply to Zardoz

Accounting is not economics. Their statements are about the most closely scrutinised ones ever, by the brightest minds in Accounting and Accounting Law. It’s extremely unlikely they are falsified.

But if you add up total money in and total non monetary incentives, and look at what’s left…. It’s not even close. Like the rest of play-office “Companies” in The West in the “Ownership Society” era; all they’ve ever done is destroy value. Being kept alive by all manners of redistribution mechanisms from what was once a competitive economy; but is now left completely uncompetitive, by the costs imposed upon it in order to pretend silliness like Tesla has some sort of NET value.

Which it never did, never will. NET being the operative word, though. Tesla has certainly done some cool things. They’ve just burned through 10x the capital in order to do so, than what the value of what they have created. As Bastiat pointed out: Competent economics is about pointing out the unseen. Not just the flashy new battery toy with the big screen. But instead all the broken windows, forced wealth transfers, crass theft and massive costs imposed on others, in order to produce the shiny new objects (which ultimately do little more, and often much less, than the much cheaper ones they will supposedly “replace.” Accounting, OTOH, is specifically focusing on the Seen. Diffused costs to third parties having no bearing at all, no matter how big.

Zardoz

3 years ago

Reply to StukiMoi

Where can I find these numbers?

JackWebb

3 years ago

This is all fine and good, but BTC has traded essentially sideways since July. No crash. We shall see. I think crypto’s a joke, but not liking something isn’t the same as its price collapsing.

RonJ

3 years ago

“Strong support is at the 6500 to 7500 level and I do suspect we will ultimately take back the entire Covid rally.”

The whole 1998-2000 U.S. Consumer as Last Resort rally, was entirely taken back. Then there was the It’s Confined to Subprime rally that was entirely taken back.

KidHorn

3 years ago

There are several Chinese EV makers that are about to sell cars outside of China. The cars compete with tesla and cost a lot less. Some will have a huge cost advantage because they’ll use sodium ion batteries. Much less expensive to produce than lithium. Batteries will have slightly less range, but won’t burn up, and the range will be good enough for many. They’ll likely avoid the US in the short term because they don’t want to compete with the $7500 subsidy, but will sell everywhere else. BYD is an example. Biggest selling EV maker in China. And in the US, Tesla will start getting a lot of competition from US makers who will also benefit from the $7500 subsidy. I don’t see Tesla as a good investment now.

vanderlyn

3 years ago

Reply to KidHorn

THANKS. i’m under the understanding they get subsidies from chinese gov like tsla credit. read something that might expire. not very confident in what i just wrote. perhaps you do. with the trade war and de globalization fully entrenched past few years, i’d suspect chinese and other countries who are on opposite side of pax amerikan trade war, will clamber for anything but us autos. it’s quite stupid that human primates do these trade wars and sanctions……..imho

worleyeoe

3 years ago

No probably not with such a narrow, expensive product line. The cybertruck should be updated to be a bit more traditional and they need to sell an inexpensive car that costs about$30K. GM is about to start catching up to Tesla in terms of sales volume in the US over the next 2-3 years.

JackWebb

3 years ago

Reply to worleyeoe

Whoever went for that “cybertruck” is not one single bit experienced with pickup trucks, from any angle. This being America, the land of experimentation and market fragmentation, and still rich if declining, they’ll sell some. But not many.

worleyeoe

3 years ago

Reply to JackWebb

As of now, it doesn’t have a rollout date. Given the downside to the economy over the next two years, it probably will never launch.

At some point, Musk will or has become his own worst enemy. The cool factor driving some of his decisions needs to give way to mass appeal.

That’s what GM will bring to the table with EVs, and Tesla will be left holding the bag.

JackWebb

3 years ago

Reply to worleyeoe

Agreed. Teslas are too expensive, too idiosyncratic, and too unreliable to last.

8dots

3 years ago

AAPL dribbled down to close Nov 9/10 gap, on high vol, taking out 26TD SL, closing above June low. NDX reached July 13/20 2020 for support. NDX daily took out only 25TD SL on high vol. // In Jan McC take the House. US debt ceiling expire on Dec 23. Next year, due to political theater, our dollar might plunge and US 10Y might rise above the 2Y, because there will be no buyers for a condemn House. NDX and the Dow might rise, before the sharks bite. Hand of God will save the House.

JackWebb

3 years ago

Reply to 8dots

Thanks! Are you Nostradamus’s 23rd-level grandson?

vanderlyn

3 years ago

Reply to JackWebb

on mish i tell people tesla going up on zerohedge i tell them it is going down. oldest scam in the book. on pornhub i tell them i have a gold butt plug with MTG blessings.

JackWebb

3 years ago

Reply to 8dots

p.s.: Watch out for them shark bites!

https://www.youtube.com/watch?v=h8iPUK0AGRo

billybobjr

3 years ago

I remember when people were forecasting self driving trucks to haul goods was the next big thing . The

weight of the batteries significantly reduce the payload capacity and range . Funny though that trains

actually are, or could be self driving and shipping goods on them is like 97 percent more efficient .

not to mention way more environmentally friendly . Who knows maybe things

of the past become the future maybe railroads make since maybe they are the future again .

JackWebb

3 years ago

Reply to billybobjr

Wellington, New Zealand has electric buses that weigh about 47,000 lbs including passengers. It’s a hilly town, and the buses use 3.5 kWh/mile. A long-haul diesel truck in the U.S. maxes out at 80,000 lbs, with an extra 2,000 lbs allowed if it’s battery powered. Interstate highways are designed to be fairly level, but there are still plenty of grades to climb.

A lithium-ion battery in a Tesla sedan weighs about 14 lbs/kWh, and Tesla says its long-haul trucks will have 500 kWh batteries. The battery will weigh 7,000 lbs not including the necessary shielding. The range will be 80% of total, or 400 kWh. At 3.5 kWh/mile, and it means that on average, it will need to be recharhed every 115 miles. Cut that a whole lot in winter or on grades.

Bottom line: I don’t think we’ll be seeing long-haul battery fueled trucks.

Doug78

3 years ago

The market giveth capitalization and the market taketh away. Since we are in a tech rout all tech companies, good or bad, get smashed. That is the way of the market and it has happened many times before notably in 2000. Then companies with excellent fundamentals like Microsoft, Amazon and Apple got killed along with the rest and saw their stock prices down 50% and more. Tesla’s fundamentals are very good and much better than any other car-maker. It has no debt, self-generating free cash flow and will probably sell 1.8 million cars next year. In addition to cars it has the powerwall business, the pickup truck and especially good prospects with the semi-truck. The products are good but the pricing is unknown. We are in a recession and nobody knows how deep it will be and how long it will last so at what price they will sell their goods and thus their profits is definitely a question mark. Nevertheless it will be hard for the legacy manufacturers to do better than Tesla when it comes to profitability per vehicle. I am pretty sure they will still make money in this recession and will come out of it stronger but that doesn’t mean the stock is a buy now. It ain’t over till it’s over and if we take 2000 as an example the good tech company stock prices stayed down for a long while. When their good fundamentals exerted themselves then their stock prices took off again.

vanderlyn

3 years ago

saylor an obvious vile and deluded nihilist con man. elon musk is unstable, with a huge dollop of hucksterism and sleaze. and his behaviour, seems like a cry for help. all this tea leaf reading, technical analysis always makes me chuckle. it’s wizard of oz, snake oil salesmen, con men fooling themselves and/or others, imho. i’m a trend follower. so simple. so profitable. just requires one to put her ego aside and decide when trading, the goal is to make money and try and lose as little as possible. we buy when things are trending up. the longer the better. when the trend stops going up, and heads down, we sell. so simple. but usually, one ends up with well over half ones trades in the red. sell the losers when they are small. hold the winners until they turn south. of course there are a hundred different ways to trade, but all the other technical trading and buying and hoping, is malarkey. there is no statistical positive correlation with underlying earnings and price of stocks unless one holds for about 15 years. read trend following by michael covel for a primer. so simple it is a wonder it works. but boy it works. for centuries.

prumbly

3 years ago

Reply to vanderlyn

You liked Musk before he decided to support free speech and revealed how the Democrats/FBI have been controlling Twitter censorship.

vanderlyn

3 years ago

Reply to prumbly

liked? thought he was a con man a decade ago? i actually don’t really give much thought about disliking or liking business leaders or politicians. they are inanimate objects in my life. on my idiot box laptop channels. all these idiots out there caught up in D v R, liking or disliking pop stars or jocks or CEOs or senators, is pure unadalterated dumbphuckery. dividing and conquering the middlebrows and lumpenproles has been a sport for ruling class betters for centuries. go read “the prince” again.

Zardoz

3 years ago

Reply to prumbly

Where is this revelation about the FBI?

vanderlyn

3 years ago

Reply to prumbly

NOPE

Felix_Mish

3 years ago

Yeah, well, didn’t Tesla have a market cap bigger than all the others combined?

So either that was a bet on vehicles being a huge growth industry – not a good bet, African demographics notwithstanding. Or it was a bet on Tesla becoming a world-wide vehicle monopoly. Or it was a bet on Tesla pulling an Amazon and dominating a bunch of synergistic industries too, along with vehicles (e.g. insurance, power storage).

Them’s long odds. Remember, car company competition is fiber optics. Good luck with that.

Tesla’s stock at $15 to $30 puts their market cap somewhere north of Ford/GM and south of Toyota.

Zardoz

3 years ago

Reply to Felix_Mish

I think the self driving thing was a huge driver of tesla’s valuation, and the idea that nobody would need to buy a car, you’d just summon one with your phone. When that all kind of fizzled, it did so slowly, in a series of disappointing autopilot releases, so people didn’t really notice that a major component of the the value they perceived was slipping away. If Elon hadn’t gone all kookypants and spooked them, the price would have probably held.

Somebody with a tranq dart gun needs to watch over these rich clowns, and protect them and all of us from their wealth induced psychoses. Dart ’em and Truman Show ’em.

vanderlyn

3 years ago

Reply to Zardoz

get the net. and men in whitecoats

vanderlyn

3 years ago

Reply to Felix_Mish

yup. tsla was a scam as a company. forget the science. musk a con man

Doug78

3 years ago

Reply to Felix_Mish

“Them’s long odds. Remember, car company competition is fiber optics.”

That applies only in certain types of jobs and to a smallish number of people. Everything you use has to be transported and fiber optical cables transmit information but cannot do physical activity.

Felix_Mish

3 years ago

Reply to Doug78

Yep. We are probably just thinking in different time frames. ‘Certain jobs and smallish number of people’ is a lot less true now than 20 years ago. And will be far less true 20 years from now.

Doug78

3 years ago

Reply to Felix_Mish

Still has a very long way to go.

Kauaifb

3 years ago

Technical chart for Bitcoin and Tesla is superbad. You are better off buying a Tesla, Tesla Solar and Powerwall and installing a Starlink than buying the stock. The half life on the Cybertruck is going to be about 3-7 minutes.

vanderlyn

3 years ago

Reply to Kauaifb

i did catch starlink satellites, moving in unison, in night sky up in redwood forest country one clear early november evening in 2020. thought it was some war games at first. had no clue. it was really wild to see.

Doug78

3 years ago

Reply to Kauaifb

Yes, Tesla’s products are good and sell well but it is not time yet to buy the stock.

9TIMES9

3 years ago

Yall ain’t figured out yet? Musk is just trolling stupid people.< He is bored.

Zardoz

3 years ago

Reply to 9TIMES9

Bored people are stupid people.

Maximus_Minimus

3 years ago

Elon saw government subsidies for green energy in the pipeline, and thought this was a good time to splurge.

He is smart but has too much money.

Still has some real products, so why mix him with the other faith based ventures.

Casual_Observer2020

3 years ago

Tesla is in trouble because Musk leveraged it to buy Twitter. Elon musk was a smart entrepreneur whose innovation in engineering was the source of his success. His downfall was becoming enamored with a social media company that is extremely far removed from any of his other companies. For years people kept getting engineering mixed up with web development, social media and information technology. It is now on display at front center at what happens when even a smart person is out of his element. Investors in SpaceX and Tesla are now alarmed. Musk fell into the lair of social media after much of this industry had been exposed as nothing more than glorified online advertising. He bought at the top and now margin calls will come on his ownership stakes in Tesla and SpaceX in order to pay debt owed by his Twitter acquisition. Musk made the cardinal sin of investing when he leveraged himself to buy at the top of the market.

TexasTim65

3 years ago

Reply to Casual_Observer2020

He did not leverage Tesla to buy Twitter. He sold some of his shares to raise 15 billion in cash to go along with his existing shares which were about 4 billion worth. This was done early in 2022.

The rest of the 44 billion came from other investors (~7 billion) and new debt (~13 billion).

https://www.washingtonpost.com/business/elon-musks-twitter-deal-is-different-than-most-lbos-heres-how/2022/11/12/7c671b64-62b9-11ed-a131-e900e4a6336b_story.html

Zardoz

3 years ago

Reply to Casual_Observer2020

I’m kind of on the fence about the ‘smart’ thing after the past few weeks. If he’s smart, he’s also mentally ill.

vanderlyn

3 years ago

Reply to Zardoz

does it even matter if he is smart, dumb, con man, weirdo……….he is a cry for help when one looks at the entire life of the man. including his personal life with child bearing……….i still don’t get twitter. it just seems like a dumb place to spend time. dis jointed group of nihilists needing to scream to millions about everything and anything randomly. i gave it the college try, but it makes no sense to me. i’m always amazed at how many books most of the people i know read. the thinkers read lots. majority read none. blogs are good, but not much knowledge. more noise. one needs wisdom to discern the diamonds in the rough. twitter seems like 99.99 percent rough.

JackWebb

3 years ago

Reply to Casual_Observer2020

Tesla’s in trouble because the car market is melting.

shamrock

3 years ago

Cool, now do gold. (weak 1600, 1500, strong 1200)

Esclaro

3 years ago

Reply to shamrock

No one cares about gold.

Zardoz

3 years ago

Reply to Esclaro

I do. It’s my favorite color…. shiny!

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