The Tesla share price has opened the session on a lower footing after it failed to hit the resistance in Tuesday’s trading. The 0.77% decline seen in the stock as of writing comes as Toyota announced that it would start selling small electric cars in China by the end of the year.
According to sources close to the situation, these EVs are to be powered by BYD Co Ltd batteries as part of a joint venture between BYD and Toyota. The price of the new bZ3 brand has not been made public. Still, there are speculations that it could come in at an entry price about a third below that of Tesla Inc.
Tesla dominates China’s electric vehicle market. Toyota’s entrance with a smaller, cheaper and more affordable EV could be a game-changer in the Chinese EV market. Investors at Tesla are concerned by the news and have put the stock on offer after two days of price gains.
Price action faltered after clearing the 274.10 price mark in a move that saved that price level as a support. The failure of bullish momentum has consigned the price action into a consolidatory pattern. The price action is trading in the range bordered by 292.24 (ceiling) and 274.10 (floor).
The bulls need to force a ceiling break to gain clear skies to aim for the 4 August and 20 September tops at 313.46. If the bulls clear this barrier, the uptrend resumes, leaving 324.69 as the next target in line (11-20 April 2022 lows). A further advance sees 341.75 (24 March and 13 April 2022 highs) become the new target. An additional target to the north lies at 360.06 (6 April 2022 high).
The reverse outlook follows a breakdown of the 274.10 price floor, where the previous low of 28 April and 29 July are located. This move would make the 6 September low at 265.11 available as a new downside target. This forms the neckline of the evolving triple top at 313.46.
If this neckline gives way and the bears push to the south, it clears the way for a potential measured move to the 225.83 support (16 June and 13 July lows). The attainment of this support target is consequent upon the bears taking out barriers at 254.39 (8 July high) and 238.99 (26 May and 10 June highs).
This post was last modified on Sep 28, 2022, 16:42 BST 16:42