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Shares of Tesla Inc. (Nasdaq: TSLA) are currently trading near $178, reflecting a significant dip from its all-time high of over $400. However, this price is a recovery from its January 2023 low of around $100. While Tesla’s stock performance has been a roller coaster over the past few years, recent earnings and news has made it even more volatile.

On Monday, Indonesia’s coordinating minister of investment announced that Elon Musk is considering an offer to build an electric vehicle (EV) battery plant in Indonesia. This potential investment aligns with Indonesia’s strategic push to leverage its rich nickel resources to develop its EV sector. If Tesla proceeds with this plant, it could secure a critical supply chain advantage, given the importance of nickel in battery production.

Despite these promising developments, Tesla faces challenges, particularly in consumer demand for EVs. A recent J.D. Power study indicated a cooling interest in EV purchases in the U.S., with the percentage of shoppers likely to consider an EV dropping from 61% in 2023 to 58% in 2024. Factors such as the affordability of EVs, charging infrastructure, and economic conditions like inflation and high-interest rates are contributing to this trend.

On the innovation front, Tesla continues to push boundaries with its Full Self-Driving (FSD) technology. Its latest FSD version, has shown remarkable improvements, providing a near-autonomous driving experience that impresses even seasoned Tesla users. The potential revenue streams from FSD are substantial, ranging from subscriptions to one-time purchases and even licensing opportunities.

Moreover, Tesla’s ventures into AI and robotics further distinguish it from being just a car manufacturer. The company’s work on projects like the Tesla Bot, advanced AI for energy management systems, and the development of the Dojo supercomputer highlight its ambition to lead in multiple high-tech domains.

Financially, Tesla has experienced margin erosion, with a significant drop in its gross margins due to aggressive price cuts, increased production costs, and investments in new models and manufacturing upgrades. Despite these challenges, Tesla’s underlying profitability remains solid, and its balance sheet is relatively strong compared to industry peers. Some analysts even speculate about the potential for Tesla to start paying dividends, which could attract a different class of investors and provide a steady income stream to shareholders.

The mixed signals from consumer demand, alongside the company’s ambitious yet costly projects, make Tesla a complex investment currently. Now, let’s see what the charts have to say about Tesla’s stock future trajectory.

Charging downhill: Tesla’s stock faces persistent bear pressure

On the 4-hour chart of Tesla, we can see the amazing recovery the stock made in the first half of 2023, when it tripled from $100 levels to almost $300. However, this recovery was short-lived as starting in the second half of 2023 the stock again turned bearish. The silver lining during the current down move has been that the stock hasn’t fallen anywhere close to its previous low and restricted the fall to $140 levels.

(Click on image to enlarge)

TSLA chart by TradingView

Despite that silver lining, the stock continues to show weakness as its 50-period EMA is below its 100-period EMA and it is facing resistance near the 50% Fibonacci retracement at $200.58. Since bears continue to control the stock, traders who want to short the stock can do so at the current level keeping a stop loss at $201. If the stock starts falling it will again take support first at $140.2 and second at $102, where profits can be booked.

Investors and traders who want to buy the stock must ideally wait for it to give a weekly closing above $200, which will suggest the return of bullish momentum. Those who want to buy the stock here must initiate a relatively small position and keep a tight stop loss at $137.8. If the stock does manage to cross $200, profits can be booked at $252.7.  

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