Equities Watchlist: Has Tesla Bottomed? Or Is It Just Pulling Back From a Bigger Trend?

A risk-friendly trading environment helped boost TSLA to its monthly highs last week.

Has the stock bottomed? Or is it just pulling back from its bigger trend?

TSLA is trading near 135.00, which is higher than last week’s open price above 125.00 and much higher than its 2023 lows below 102.00.

In fact, TSLA capped its second consecutive positive week after a weak start to the year!

Tesla Inc (TSLA): Daily

Tesla Inc. Daily Equity Chart by TradingView

We don’t have far to look for the cause. Start-of-year risk-taking and not-so-disappointing U.S. earnings reports have encouraged traders to price in soft landings or mild recessions for the major economies.

But that was last week. This week we’ll hear from more Big Tech companies including Microsoft, Intel, and Tesla.

Can TSLA’s earnings reports on Wednesday extend its 2023 upswing?

Markets expect the company to report $24 billion in revenue and around $1.13 earnings per share in Q4. That’s higher than the $0.85 EPS and $17.72 billion reported earnings from a year ago!

TSLA has been showing higher highs and higher lows since the start of the year so it won’t be a stretch to see TSLA breaking above its daily trend line resistance if we do see strong revenue and earnings numbers.

I wouldn’t expect much upside surprise though. The company’s Q4 2022 deliveries data printed earlier this month already missed expectations. More importantly, they hinted that increased competition and price cuts could thin the company’s margins a bit.

Downside surprises or a round of risk aversion in the markets could extend TSLA’s downtrend that restarted in September last year.

TSLA could get rejected from its current levels near the 38.2% Fibonacci retracement and traders could play the bearish divergence all the way to January’s lows.

What do you think? Which way will TSLA go?

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