Tesla reported earnings last night and it’s an unmitigated disaster quarter.  These guys keep talking about making 1.5K Model 3’s per day, but they only produced 260 last quarter.  It’s a joke.

The company has been riddled with executive departures and it’s showing.  The best case scenario is they lose a lot more money for a year or two longer than people thought maybe 6 months ago.

I think every stakeholder was aware they’d have to subsidize Tesla again even after August’s junk bond offering (that immediately went red BTW).  At the same time, where do stakeholders draw the line?  As bad as these results are, there’s still plenty to be hopeful about and some substance to that hope as well.

Electric vehicles are still the future and Tesla still has some of the best software.  The Powerwall is something that in some form (not necessarily a Tesla product) will probably be a fixture in our kids’ homes.  Battery powered 18 wheelers, if they can accelerate and get up to speed like a car, could be groundbreaking in making ground transportation more efficient.

Looking at the shares, price is quickly approaching the top of the 2014-16 range.  That’s the next key support area to watch.  It’s hard to be negative the stock while it’s above this clear area.  If you think about the people holding stock from higher levels than here, it’s mostly chasers.  Quarters like and the subsequent price action can scare out plenty of weak holders.

Other notable levels 240 and 180 are highlighted as well.  On an immediate time frame watch the 305-310 area (this morning’s high and important VWAP levels as noted by Brian Shannon).

tsla

So what do you do?  Operationally, Tesla is going to be a mess for as far out as we can see.  The company is now a show me story IE show me some results.  We have to take into account the market is crushing momentum names that are disappointing investors.  Is a 25% discount enough?  I don’t know.  Everything gets priced in eventually, but unless shares get back above that 305-310 area, it’s hard to make the technical case for a long in the immediate term.