Summary
• Tesla (NASDAQ:TSLA) sank 3% on Tuesday, after the company posted a sales breakdown that showed a big decline in US sales.
• Based on its market cycles, we believe the stock is due for further declines, which if timed properly, could be a chance for the bulls to buy.
Tesla (NASDAQ:TSLA) released its official earnings data last week, beating the average earnings forecast but missing on sales. On Tuesday, the company released the geographic breakdown for its sales figures.
The data indicate that sales in the US fell from over $5 billion to $3 billion annually. Yet it also showed sales in China spiked by over 60% to $669 million and in the remaining countries sales rose by over 120% to $1.83 billion.
Our approach to stock analysis uses market cycles to project price action. TSLA has risen sharply, but hit an important resistance zone last week. The stock may now be in the declining phase of the current market cycle and due for a pullback. It could find good support near $307, with a chance at $288 in the next few weeks. We think this dip is a buy.
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