Tesla’s earnings, due out on Jan. 26, are the next big point to watch for the stock.
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The tech selloff is set to continue Friday, dragging down a lot of stocks, including shares of Tesla . The stock has held up reasonably well to start 2022, but it could be due for a nastier drop if it doesn’t maintain recent levels.
Coming into Friday trading, the Nasdaq Composite was down 9.5% so far in 2022, marking a lousy start to the year for faster-growing tech stocks. Nasdaq futures are down 0.9% Friday morning, worse than the 0.5% and 0.2% drops in the S&P 500 and Dow Jones Industrial Average.
Investors can blame Netflix (ticker: NFLX) for Friday’s early trading action. Weaker than expected subscriber growth for the fourth quarter, reported Thursday evening, has sent the shares down roughly 20% in premarket trading.
Tesla (TSLA) stock isn’t connected to Netflix in any way, although Tesla owners can access Netflix on their vehicle flat screens when parked. But Tesla shares, just like any stock, can’t avoid broader market trends.
Tesla shares were down about 1% in premarket trading, below $990 a share. If Tesla stock can’t remain around $990, then $900 looks like the next stop for the price. That would put shares down about 15% in 2022.
This, of course, is only a technical argument for what can happen to Tesla shares. But traders watch moving averages and patterns to try to make short-term gains. The technical charts matter, especially in the short run.
Of course, there is a fundamental data point coming that can overwhelm technical considerations. Tesla will report its fourth-quarter earnings on Jan. 26. Wall Street is projecting about $2.30 in per-share earnings. Forecasts have been rising since the company reported higher delivery numbers cars than expected for the fourth quarter. Tesla delivered almost 309,000 vehicles, while Wall Street projected closer to 270,000 cars.
A big earnings “beat” could certainly help Tesla stock.
Investors and analysts will also be anxious to hear from CEO Elon Musk, who doesn’t always speak on Tesla’s earnings conference calls. He is slated to appear this time to give a product update. Investors are wondering if he will make news with the timing for deliveries of Tesla’s Cybertruck, when the company might launch a lower-priced model, or details about how the startups of two new Tesla plants, in Texas and Germany, are proceeding.
Musk will have to deliver very good news if Tesla stock is to break free of recent market trends.
Write to Al Root at [email protected]
