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Tesla tanks in ‘transit’ trouble

Another Elon Musk Tweet is coming back to haunt him, but that could be the least of the company’s troubles this year


The SEC began contempt proceedings against Musk for violating a settlement that originated from his infamous “funding secured” tweet. With a huge Tesla production drop in the first quarter, the regulator now has more ammo. Tesla cranked out 77,100 cars and delivered 63,000, down 11% and 30% respectively, with 10,600 vehicles “in transit” at quarter end. To hit 500,000, Tesla needs to boost production to 11,000 a week, versus its peak 7,000.

Missed production targets also play havoc with Tesla’s shaky finances as demand flags. Model 3 production was flat, reflecting reduced U.S. tax breaks. Luxury Tesla shipments were down by half. Q1 net income will “be negatively impacted” Tesla said, though it has “sufficient cash on hand”. It’s Q1 earnings are due on 19th April. Either way, consensus for a cash-positive year has to come down.

As such, sellers have targeted the year’s $254.65 low again, looking for 2018’s $244.9 floor. TSLA broke its Thursday fall above both, bouncing at $260.58. It is beginning to fill a gap up to Wednesday’s $297.80 close. Filled orders could see the gap close. But the clearest pattern on TSLA’s chart is a clean falling wedge. If price gets back above its 21-day exponential moving average, last at $280.9, it will still face falling trendline resistance around $290. 220-day MA is at $313. A trip to support may be needed first before sustained upside.


Tesla CFD – daily [04/04/2019 20:21:46]

Source: City Index

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