• 17
  • 7
  • 1

A Tesla 'death cross' is coming, the first in more than 2 years

Dow Jones2021-07-09

MW A Tesla 'death cross' is coming, the first in more than 2 years

Tomi Kilgore

Tesla's 50-DMA is set to end a 20-month run above the 200-DMA, which could be a warning of further losses for the stock

Barring a massive rally, Tesla Inc.'s stock chart will produce the first bearish "death cross" pattern in more than two years on Friday, which some technicians could view as a warning of further losses.

The electric vehicle industry leader's stock $(TSLA)$ rose 1.0% to $650.97 in afternoon trading Thursday, reversing an earlier loss of as much as 3.8% at the intraday low of $620.46.

The 50-day moving average $(DMA.AU)$, which many Wall Street chart watchers use as a guide to the shorter-term trend, fell to $630.35 in recent trading, and has been falling by an average of $1.13 a day over the past month.

Meanwhile, the 200-DMA, which is viewed by many as a dividing line between longer-term uptrends and downtrends, rose to $629.58, and has been rising by $1.10 a day over the past month.

That puts the 50-DMA on track to cross below the 200-DMA on Friday, which would snap a 20-month streak in which the 50-DMA has been above the 200-DMA.

Don't miss: Tesla releases a cheaper Model Y in its battleground China market .

Also read: China's retail sales of passenger card declined in June .

The point where the 50-DMA crosses below the 200-DMA is referred by technical analysts as a "death cross," which many believe marks the spot a shorter-term pullback evolves into a longer-term downtrend.

At current prices, the stock would have to soar 12.3% to close at $730.76 on Friday to keep the 50-DMA above the 200-DMA, according to MarketWatch calculations of FactSet data.

Death crosses aren't usually seen as good market timing tools, given that their appearances are telegraphed far in advance. To some, they only represent an acknowledgment that a stock's pullback has lasted long enough and/or extended far enough to consider shifting the narrative on the longer-term outlook.

Tesla's stock hasn't closed at a record since Jan. 26, and was recently trading 26% below its record of $883.09. Meanwhile, other Nasdaq-listed megacapitalization stocks like Apple Inc. $(AAPL)$, Microsoft Corp. $(MSFT)$, Amazon.com Inc. $(AMZN)$ and Alphabet Inc. $(GOOGL)$ have all set fresh records this week, and Facebook Inc. (FB) shares closed at a record last week.

Tesla shares have shed 7.7% year to date, while the Nasdaq Composite Index has gained 13.0% and the S&P 500 index has advanced 15.0%.

And Tesla's death cross could still warn of further losses.

The last death cross appeared on Feb. 28, 2019, about two months after it reached a multi-month closing peak, and after closing 15% below that peak. The stock tumbled another 44% before bottoming out three months later.

If it's any consolation to Tesla investors, the stock charts of some rival EV makers have already produced death crosses: Nio Inc.'s $(NIO)$ appeared on May 24 and Nikola Corp.'s $(NKLA)$ appeared on Nov. 3, 2020.

-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com

 

$(END)$ Dow Jones Newswires

July 08, 2021 15:14 ET (19:14 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Report

Comment7

  • Modou
    ·2021-07-09
    ?
    Reply
    Report
  • 长流远源
    ·2021-07-09
    Up
    Reply
    Report
  • 长流远源
    ·2021-07-09
    [微笑] 
    Reply
    Report
  • AshpA
    ·2021-07-09
    Thanks
    Reply
    Report
    Fold Replies
    • iamme
      ok
      2021-07-09
      Reply
      Report
  • meowx3
    ·2021-07-09
    Fud
    Reply
    Report
  • cheryltanat
    ·2021-07-09
    Whole market is moving down not tsla alone is down. 
    Reply
    Report
    Fold Replies
    • Tomji
      The article is warning of a sharp drop. so telsa investors need to buKle in or eject out.
      What would be you move??
      2021-07-09
      Reply
      Report
    • AshpA
      Fair statement
      2021-07-09
      Reply
      Report
    • Darylzhuo
      Yup
      2021-07-09
      Reply
      Report
  • Engengcheng
    ·2021-07-09
    Agree
    Reply
    Report
 
 
 
 

Most Discussed

 
 
 
 
 

7x24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Company: TTMF Limited. Tech supported by Xiangshang Yixin.

Email:uservice@ttm.financial