- Tesla reports 55% production increase in Q2
- Net reservations stand at 420,000
- Analysts disagree whether firm can sustain 5,000-per-week production target
The share price of Tesla Inc. increased by about 6% in pre-market trading yesterday. This followed the release of an update for the second quarter.
Although the electric car manufacturer reported a quarterly increase of 55% in production for Q2 – matching its 5,000-vehicle-a-week production goal – deliveries of Model 3 cars were only 18,440, which is significantly lower than analysts’ expectations of between 20,000 and 25,000.
Net reservations came in at around 420,000 with 28,386 cars delivered until now, the company said.
Analysts disagree about whether Tesla’s production target of 5,000 vehicles per week is sustainable. In addition, US President Donald Trump’s proposed automotive tariffs could severely affect the stock, along with firms such as Ford Motor Company and General Motors. The 20% tariff on foreign cars might cause retaliation from other major auto-producing countries that could negatively affect local auto makers.
From a technical point of view, Tesla stocks were in bear mode, moving lower to $333.51 (a pivot point level) by noon on Monday. The RSI dropped to a neutral 51.39, while the moving average convergence divergence (MACD) showed a bearish crossover late in June. The trend remains bearish, so traders should expect more drops before the price starts improving.
What traders might want to look out for is a downward break from the pivot point toward the 200-day MA support at $322.33. The next support level is the $315.00 trend-line, followed by the 50-day MA at $309.57.
Falling below these levels could bring further drops, even to $300. However, if the price rebounds from the pivot point, $370.00 or even $383.17 (the R1 resistance) could be possible.
