Tesla stock advanced, paring an early jump, Tuesday after recording its second-best daily gain since March 21 on Monday, breaking a string of six straight losses.
TSLA trimmed an early 4% gain to 0.8% during Tuesday's market trading. Last week's China insurance registration data showed Tesla sales remained almost flat vs. the prior week. On Monday, Tesla stock gained 7.3% to 231.28. Monday's performance cut TSLA stock's losses in August to 13.5%.
So far in August there have been 39,400 Tesla insurance registrations in China, that's up 125% vs. the same period in 2022 and keeps the EV company on pace to be around its China Q2 levels.
In the second quarter, Tesla sold 247,217 China-made vehicles, representing about 53% of Tesla's record setting 466,140 global deliveries. Analysts expect 473,000 global deliveries in Q3, according to FactSet.
Meanwhile, reports continue to circulate about the Tesla's updated Model 3, code-named Highland, in China. On Tuesday, a local media source reported that mass production and deliveries of the new Model 3 will start at the end of September. Other local news outlets said some stores are already taking reservations for the Model 3.
There is also more executive shakeup at Tesla. On Monday, Colin Campbell, who served as vice president of powertrain engineering, announced on LinkedIn he had left Tesla after seventeen years. Campbell is joining Redwood Materials as chief technology officer. Redwood Materials was founded by Tesla co-founder and board member JB Straubel.
This comes after Tesla announced on Aug. 7 that Chief Financial Officer Zachary Kirkhorn had stepped down. The EV giant reported in federal filings that Vaibhav Taneja took over from Kirkhorn on Aug. 4. Taneja will now serve as CFO as well as his current role of chief accounting officer.
Tesla Stock: What's It Doing
TSLA shares pulled back after reporting second-quarter financials on July 19. Investor concerns over falling gross margins outweighed the global EV giant's above-forecast earnings and revenue. News of sales from Cathie Wood's ARK Invest ETFs may also have fueled some downside momentum.
Tesla stock declined more than 11% to 215.49 last week in six consecutive losses. Two weeks ago, Tesla stock undercut support at the stock's 50-day, 10-week moving average. TSLA finished that week more than 2% below the 10-week line, which is a clear sell signal, according to IBD analysis.
However shares roared back Monday. TSLA is above its 200-day moving average, but has run into possible resistance around 240 — the level of its late-June low. The stock's early rally on Tuesday topped out, then turned lower as its ran into its 21-day exponential moving average.
Keep in mind, the stock market remains in a correction. Friday's advance marked the beginning of a rally attempt, and a follow-through day could confirm a new uptrend as early as this week. But until that occurs, investors should be playing defense with their capital, and build watchlists of top stocks near buy points to act on once the market status shifts.
Tesla stock ranks fourth in IBD's automaker industry group. It has a 94 Composite Rating out of 99. Tesla stock has a 87 Relative Strength Rating and its EPS Rating is 94 out of 99.
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