Tesla Earnings Ahead: A Technically Balanced Machine

Andrew Kassen

Tesla Motors (TSLA) reports Q3 2013 earnings just following the bell today. Estimize consensus pegs the release of Tesla Earnings at $0.22 EPS with revenues of $564.95 million, figures representing a sound beat of the Wall Street consensus of $0.12 EPS and 553.46 million (read See It Market’s interview with Estimize founder Leigh Drogen here).

Ahead of the print, my appraisal of TESLA is one of technical balance, with price-based pros and cons present across time frames.

Short-term, TESLA spent October in a descending channel that is now spilling over into November.  This channel marks a return to the longer-run primary trend rising channel begun after Q1 Earnings in May.

Following a 3-day bounce off fibonacci cluster support between $155-$160 today’s open brought a solid gap-up, beginning trade at $180, right on channel resistance. Opening trade took the stock as high as $181.43 before fading 6% to cut into yesterday’s range and chip away at its 20-Day and 50-Day Simple Moving Averages.  The 20-Day proved an impenetrable support floor throughout the third quarter, but had negligible relevance since mid-October.  Proximity to the 50-Day – a line not touched since late March – may provide important support, but is otherwise indicative of the slowing momentum that has characterized TESLA since October began.

TESLA Motors (TSLA) – Daily: Descending Channel into Key Moving Averages

Tesla Earnings

 

Inside the 5-week channel, TESLA has formed a pair of two Bearish Cypher harmonic patterns.  To get an idea of what can follow the current pattern, see the first: a -15% move in (from D’s swing high through X to A’s swing low) 7 trading days.  A similar move off today’s high at D looks for $154, near the current pattern’ point C.  That outcome brings the stock back to last week’s lows – with the next major support rung beneath it at $133-$135 realistic on a significant TESLA earnings disappointment.

Tesla Motors (TSLA) – 1 Hour: Dual Cyphers

Tesla Earnings

 

This channel and these patterns articulate the net lack of progress TESLA has made since late August.  As much as a testament regarding the stock’s parabolic rise this year as a level of immediate resistance, this has all occurred between the 947.2% and 1109% (yes, those are legitimate fibonacci levels) extensions off the saucer bottoms that marked late 2010-early 2013.

Tesla Motors (TSLA) – Weekly: Extreme Fibonacci Resistance

Tesla Earnings

 

Where’s the balance?  Each of these markets points to a very bullish scenario that may following TESLA earnings, as well.  The 1109% and 947.2% extensions have marked the range extremes of a descending channel/flag in TESLA‘s primary rising trend.  This is a potential High & Tight Flag that may be setting the stage for a measured move up above 181 and 09/30/13’s $194.49 all-time high, toward one of several targets near $210, $240 and even as high as $290-$300.  Those levels are projections, not forecasts; but the setup to this point makes them a plausible medium-term (i.e. approx. 3-12 months) outcome.

Tesla Motors (TSLA) – Daily: Measured Moves Up, Possible High & Tight Flag
Tesla Earnings

 

Twitter: @andrewunknown and @seeitmarket

Author holds no exposure to securities mentioned at the time of publication.

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