Market News

Assessing the Impact of Tesla’s Q3 Earnings Miss Assessing the Impact of Tesla’s Q3 Earnings Miss

Tesla, Inc TSLA witnessed a significant dip of about 13% on Thursday following a Q3 earnings miss. The miss, something that Benzinga had anticipated due to a bear flag development on the stock’s chart, saw Tesla reporting earnings per share of 71 cents on revenues of $25.17 billion, falling short of the Street’s estimate of earnings per share of 74 cents on revenues of $25.62 billion.

Traders and investors leveraged Tesla’s downward trajectory by exploring opportunities in the AXS Short Innovation Daily ETF SARK, which offered a return of about 0.9% on Thursday.

The actively managed SARK ETF aims to inversely track the daily performance of Cathie Wood-led ARK Innovation ETF ARKK, the latter holding a 7.77% weighting of Tesla.

Tesla’s slip on Thursday, accompanied by higher-than-average volume, signaled a breakdown from a bear flag, with the measured move of the flag projecting a potential drop toward the $171 level in the short term.

The stock’s decline also confirmed the continuation of the downtrend, with the Jan. 22 high of $217.80 representing the most recent lower high within the formation. It is expected that Tesla will, at some point, rally transiently to print at least another lower high.

Looking ahead, bullish traders anticipate the formation of a bullish reversal candlestick, such as a doji or hammer candlestick, as an indication of a local bottom and an impending rebound, likely to be accompanied by decreasing bearish volume. Conversely, bearish traders hope for the stock to close Thursday’s trading session near the low-of-day, signaling a potential continuation of selling into Friday. In such a scenario, Thursday’s candlestick might indicate a bearish kicker candlestick, possibly followed by a second gap lower.

See also  The Green Thumb: Tyler Technologies (TYL) Partners with Kentucky for Medical Cannabis Program

In terms of technical levels, Tesla faces resistance at $190.41 and $200.51, with support at $177.59 and $166.71.