Tesla’s stock sees a 6% decline due to weak automotive revenue and a cautionary note about slower growth in 2024.

FUNDAMENTAL OVERVIEW:

• Tesla posted a 3% growth in revenue for the fourth quarter, falling short of expectations.
• Auto revenue saw a mere 1% increase compared to the previous year.
• The company cautioned that the growth rate in vehicle volume for 2024 might be significantly lower than the rate observed in the preceding year.

Tesla disclosed fourth-quarter revenue and profit figures below analysts’ expectations, with automotive revenue seeing only a 1% increase from the previous year. Consequently, the stock dropped nearly 6% in after-hours trading.

Total revenue registered a 3% increase, reaching $24.3 billion compared to the previous year. The operating margin for the quarter stood at 8.2%, a decline from the 16% figure in the year-ago quarter, yet slightly higher than the 7.6% reported in the prior quarter.

The modest growth in auto revenue was attributed in part to a decreased average selling price, resulting from significant price reductions globally in the latter half of the year. Net income for the quarter more than doubled, reaching $7.9 billion, or $2.27 per share, compared to $3.7 billion, or $1.07 per share, in the previous year. The notable increase was largely driven by a one-time noncash tax benefit of $5.9 billion.

In its investor presentation, Tesla communicated that the growth in vehicle volume for 2024 could be significantly lower than the rate observed in the previous year. The company cited its focus on launching the “next-generation vehicle” in Texas as a contributing factor and cautioned investors about being presently situated “between two major growth waves.”

TESLA TECHNICAL ANALYSIS DAILY CHART:

Technical Overview:

Tesla is currently trading within a down channel.

Tesla is positioned below all the Moving Averages (SMA).

The Relative Strength Index (RSI) is in the Selling zone, while the Stochastic oscillator suggests a Negative trend.

Immediate Resistance level: 218.03

Immediate support level: 205.37

HOW TO TRADE TESLA

Following a notable surge, Tesla faced a decline as it made several unsuccessful attempts to breach the resistance level. Currently, Tesla is testing its support zone, and a breakdown below this zone may signal the potential for further decline.

TRADE SUGGESTION- STOP SELL– 196.93, TAKE PROFIT AT- 171.74, SL AT- 215.31.