Tesla (TSLA) stock will probably open lower on the Friday session as there is news about price cuts in the USA. Its been several months now since Tesla (TSLA) has been under pressure. In fact, the EV car maker's stock is already down by 70% from its high of September 2022.
During the premarket session of Friday, Tesla stock had already lost 6% and was last seen trading around the $116 level.
There is no doubt about the fact that Tesla has fallen from its grace and is no longer enjoying the bullish run it once used to be. For now, Tesla stock is avoiding the $100 level since it is a major support. But when we look at the bounce it made from these levels, it doesn't send a good signal to the bulls.
In the USA, Tesla has announced price cuts for its cars which will help the company sell more cars. But the strongest point about Tesla is most definitely the margins that it enjoys as compared to other auto manufacturers.
There is no doubt that cutting prices will affect Tesla's profit margin, which was one of its major advantages. Earlier, we already saw Tesla announce price cuts for the Chinese markets, and now the same is done for the US consumers.
According to the reports, the price cuts will allow Tesla to become eligible for government credits. But we can't ignore the fact that a price cut of 20% is still large enough to affect the margins in a significant way.
If we look at the technical side of Tesla stock, it seems that the recovery will start around the $126 price zone. On the upside, the most probable resistance is located at $150, and the most important support is $100. So based on these two levels, there's an area of $50 that will fall into the range trading zone.