A technical analysis explains why Tesla (TSLA, $162.15) fell 6% as price cuts reduced quarterly profit margins.
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Tesla's stock price (TSLA) has experienced a 6% decline as the company's recent price cuts have negatively impacted its quarterly profit margins. This article delves into the technical analysis of Tesla's stock, examining the bearish crossover of its 10-day and 50-day moving averages and the historical significance of this pattern. The analysis will also assess the likelihood of a continued downward trend and its implications for investors.
On April 11, 2023, the 10-day moving average for TSLA crossed bearishly below the 50-day moving average, indicating a shift in the stock's trend from bullish to bearish. This crossover could be considered a sell signal for investors, as it typically represents a weakening in the underlying stock's momentum.
An examination of past instances when the 10-day moving average crossed below the 50-day moving average shows that in 11 out of 12 occurrences, the stock continued to move higher over the following month. This suggests that although the current bearish crossover may signify a short-term decline, the stock has historically managed to recover its losses in a relatively short period.
However, it is crucial to note that each instance may be subject to unique market conditions and external factors. Therefore, past performance should not be solely relied upon as an indicator of future results.
Despite the historical tendency for Tesla's stock to rebound following a bearish crossover, the odds of a continued downward trend currently stand at 90%. This elevated probability is primarily due to the impact of Tesla's recent price cuts on its quarterly profit margins. As the company's profits are squeezed, investors may become increasingly concerned about the stock's performance and long-term growth prospects.
Given the current technical analysis and the 90% odds of a continued downward trend, investors should closely monitor Tesla's stock and consider potential risk management strategies. These may include setting stop-loss orders or diversifying portfolios to mitigate the impact of a potential decline in Tesla's stock price. Additionally, investors should keep an eye on the company's financial performance and any new developments, as these factors could significantly influence the stock's trajectory.
Tesla's stock price has fallen 6% as price cuts have negatively affected the company's quarterly profit margins. While the bearish crossover of the 10-day and 50-day moving averages may suggest a short-term decline, the stock has historically managed to recover in similar situations. However, given the 90% odds of a continued downward trend, investors should closely monitor the stock and consider appropriate risk management strategies to protect their investments.
TSLA sees MACD Histogram crosses below signal line
TSLA saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on October 03, 2025. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 46 instances where the indicator turned negative. In of the 46 cases the stock moved lower in the days that followed. This puts the odds of a downward move at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for TSLA moved out of overbought territory on October 02, 2025. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 35 similar instances where the indicator moved out of overbought territory. In of the 35 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where TSLA declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 21, 2025. You may want to consider a long position or call options on TSLA as a result. In of 80 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where TSLA advanced for three days, in of 337 cases, the price rose further within the following month. The odds of a continued upward trend are .
TSLA may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 285 cases where TSLA Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. TSLA’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 82, placing this stock slightly better than average.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (18.868) is normal, around the industry mean (4.091). P/E Ratio (261.292) is within average values for comparable stocks, (273.848). TSLA's Projected Growth (PEG Ratio) (7.679) is very high in comparison to the industry average of (1.941). TSLA has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.046). P/S Ratio (16.639) is also within normal values, averaging (30.230).
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General Information
a manufacturer of electric sports cars
Industry MotorVehicles
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