Markets Holds Breath Awaiting TSLA Earnings Report

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Alex Partida

Oct 19th 2022  .  3 min read

Markets Holds Breath Awaiting TSLA Earnings Report

When Netflix reported positive earnings after Tuesday’s close, the S&P pushed higher with the help of the Nasdaq. The report raised the market by beating earnings per share expectations and guiding with positive advertisement numbers. The ad space is alive and well; this guidance can potentially be seen in other ad names such as Snapchat (SNAP), Meta Platforms (Meta), Google (GOOGL), and Roku (ROKU).

The overnight push by the indexes didn’t last long as the slow trickle down to the psychological level of 3,700 was an early indication of today’s price action. Buying pressure and volume were lackluster throughout the session once the opening bell rang. There were some upside moves within the day, but today was just another testament to the macro environment that the market is in. 

Indices see volatile afternoon 

Temporarily, 3,700 on the S&P 500 futures were able to hold as support, sending the market higher toward the 21-day exponential moving average (EMA) at 3,730. This level of liquidity rejected the market and sent it on a slow tumble for the next few hours. 

The market again started to chop around to end the day and become more volatile than usual. When earnings loom, and a big name such as Tesla is set to report, this price action should not be surprising. Often big money on Wall Street is getting positioned for the potential market reaction to the report.

Danielle Shay gives her insight on Tesla

With Tesla reporting after the close, this is what Danielle Shay, VP of Options at Simpler Trading, has to say about her expectations for the stock:

“So in TSLA’s case, a normal, expected market maker move would bring TSLA stock price down to the lows of the year, at a key support zone of $200. However, a move greater than expected would equal a new low and a break in key support. Conversely, a regular MMM to the upside would only equal a weak reversion to the 21 EMA on the daily chart, a key resistance zone. Even if they do experience a move twice of what is expected, up into $260, it would be a phenomenal move…but, again would bring the stock price into a key resistance zone. TSLA would need to break above $280 to be back in an upward trend, which is statistically highly unlikely on this report. Therefore, even if TSLA reports well and the stock trades higher and takes tech stocks with it, traders should be warned that there is significant overhead resistance and it likely wouldn’t change the overall downtrend.”

Market gives back some gains

At the close, both the Nasdaq and the S&P 500 were negative. The S&P 500 closed down 0.66%, losing 24 points, while the Nasdaq  closed down 0.88%, a loss of 94 points. The Dow Jones followed along, declining 100 points, losing 0.33%.