Tesla Trading Pattern Looks Bleak After Tough Start to 2021


Tesla Inc. investors just closed out the worst half-yearly run since June 2019, and the electric-car maker’s shares are approaching a technical level that some chart watchers see as a harbinger of further losses.

The lackluster performance in recent months has culminated with the stock now on the verge of a so-called death cross. That’s when a security’s average price over the last 50 days falls below that of its 200-day moving average. It’s a closely watched technical measure that may portend a period of continued declines. In Tesla’s case, the last time shares formed this trading pattern was in February 2019 and preceded a more than 40% decline in the share price to $35.79 from $63.98, within a span of 65 days.

Tesla Trading Pattern Looks Bleak After Tough Start to 2021

To be sure, while the death cross often implies more pain to come, “sometimes the moving averages will meet and dance together for a bit before bouncing off one another,” said Dan Ushman, the chief executive officer of TrendSpider, a technical analysis software company for traders.

Tesla shares have declined 3.7% in the first six months of the year, underperforming the broader S&P 500 Index amid a growing threat of competition from traditional automakers, as well as lingering concerns about an erosion in its market share in China. They traded at $681.02 on Thursday morning in New York.

©2021 Bloomberg L.P.

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