On CNBC's Fast Money June 30th, Carter Worth of Worth Charting breaks down the charts of Tesla and why it is pointing to $450 per share. "We think the price keeps getting weaker and you will see further revisions to price targets."
#tesla #elonmusk #technicalanalysis
#tesla #elonmusk #technicalanalysis
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00:00 I want to talk Tesla, Carter, because you had a provocative call out on Tesla.
00:04 We're expecting delivery numbers for Q2 over this weekend.
00:07 Analysts are expecting slower growth for the first time in two years, especially because
00:11 of the China lockdowns.
00:13 What do you see?
00:14 Well, I mean, look, this is a darling, or it was a darling, that is less of a darling.
00:19 But the question is, after dropping 50 percent, is it somehow taken care of, or is there more
00:24 risk?
00:25 My hunch is more risk, and let's try to figure it out.
00:28 First chart, we have a trend.
00:30 That's incontestable.
00:31 I didn't make the line fit.
00:32 It is the line, and we broke trend.
00:34 And notice, after breaking trend, we've been sort of consolidating this tight range below
00:39 the trend line.
00:40 So you have what you would call equilibrium.
00:43 Another way to do it is to actually highlight-- and you'll see that here-- what is known as
00:48 a diamond formation.
00:49 And it sounds kind of wonky.
00:51 It doesn't matter what you call it.
00:53 It represents equilibrium.
00:54 After a great sell-off, down 50 percent, the debate is on.
00:58 Some people step in.
00:59 Should we buy it?
01:01 Should we sell it?
01:02 But usually, you're resolved in the direction of the primary move.
01:06 So you have a sharp sell-off.
01:08 You have the debate, equilibrium, buyer-seller, is it good, is it bad, is it finished?
01:12 Yes, it is.
01:13 No, it isn't.
01:14 And then you have the second down leg.
01:15 And presumptively, that's what's coming.
01:18 You'll see here on the next chart, a measured move.
01:20 The width of this tight consolidation is about 170 points.
01:25 Were you to project down another 170, it takes you to as low as $450 a share.
01:31 Now here's the remarkable thing.
01:33 Let's just put this all in context.
01:35 The street, right, in the beginning of the year, had a price target of $1,200 a share,
01:41 50 analysts.
01:42 They've reduced that number to 900.
01:46 So they've reduced their estimates for this stock, looking forward by 30 percent.
01:50 But the stock is down 50.
01:52 Usually, price action is ahead of analysts' estimates.
01:56 We think the price keeps getting weaker, and you'll see further revisions to price targets.
02:00 Is the context to this sharp Tesla drop that you're predicting a sharp market drop as well,
02:07 Carter, or a sharp mega-cap tech stock drop?
02:11 I suppose that would be convenient or would make sense.
02:13 It would be tough.
02:14 But in many ways, Tesla is idiosyncratic.
02:17 And I think extreme weakness could happen in and of itself and have nothing to do with
02:21 the market.
02:22 But surely, general weakness, Tesla would participate.
02:25 Carter, thanks.
02:26 Good to see you.
02:27 Carter Braxton Worth of Worth Charting.