Tesla stock is set to drop for a second consecutive day, as investors balance weak sales data and hope from CEO Elon Musk. Early Thursday trading, brings key technical support back into view.
Tesla stock was down 0.9% in premarket trading at $170.28 while S&P 500 and Nasdaq Composite futures were down about 0.3%.
Telsa stock finished 2.9% lower on Wednesday, along with many other auto stocks, after the March inflation report showed prices rose faster than expected, hurting chances for Federal Reserve interest rate cuts later in the year.
Tesla investors also had to digest weak sales data coming from China. Sales in the first week of April amounted to just 1,880 units, down 89% week over week and down 86% month over month, according to industry data tracked by Citi analyst Jeff Chung.
In March, the electric vehicle giant sold about 62,000 vehicles in China, or about 4,800 units a week.
The Wednesday drop snapped a two-day win streak catalyzed by a tweet from Musk about a robotaxi reveal on August 8. The tweet, late Friday, followed a week of volatile trading following Tesla’s weak first-quarter delivery number.
Tesla stock dropped almost 5% on April 2 after the company reported first-quarter deliveries of 387,000 units, some 20,000 below the Street’s lowest estimate. Still, Tesla stock never closed below $164 a share, a key support level cited by Fairlead Strategies co-founder Katie Stockton. She is a market technical and looks at charts to see where shares of any company can go over short- and medium-terms.
Charts carry a lot of information about where investors feel relatively bullish and bearish. The $164 level is one where investors feel like adding to Tesla positions — for now.
Tesla stock looks stuck in a range between $165 and $185. Something will have to change for the stock to move beyond that band. Earnings due on April 23 could be that catalyst.
Write to Al Root at allen.root@dowjones.com