Tesla (NASDAQ: TSLA) was hit by a series of bad news within the past couple of weeks, including a delivery drop in China during the month of July by 31% compared to June, as well as a National Highway Traffic Safety Administration (NHTSA) investigation on the Model 3 steering wheel issues.
This has caused the stock price to drop by almost 11%, from a July 19 peak of $299.50 to $250.60.
Can Tesla’s stock price recover to $300 and beyond in August?
TSLA stock technical analysis
Tesla barely reached $300 on July 19, a strong resistance level that has already proven hard to break in the months of July through October 2022.
Within the pullback, a strong support level formed at $250, which coincides with the 50-day simple moving average.
The stock price already bounced off of this level while forming a descending wedge pattern. This is a bullish pattern that is likely to break out on the top side. A break of this pattern should move the price to $275, making $300 an achievable price target in the next few weeks.
TSLA stock daily price chart. Source: StockCharts.com
5 analysts maintained a target price of $300 and higher
Analysts from Deutsche Bank, CFRA, Baird, and Mizuho Securities have maintained or reiterated their buy and outperform ratings on TSLA stock in July. Their target price ranges from $300 to $330.
Those who don’t see Tesla hitting $300 soon have a target price of between $250 and $278, which is in line with the technical chart analysis price levels.
TSLA analyst ratings. Source: Interactive Brokers Fundamentals Explorer
Despite all the headwinds in the current macroeconomic environment, Tesla is financially strong, with over $23 billion in cash and a revenue growth of 47% year over year. What’s more, Tesla is not just a car company — it’s a tech company.
It offers a vast product range from solar energy and self-driving technology to AI chips and humanoid robots.
This makes it hard to put a traditional financial valuation. Investors who recognize the vision of Elon Musk shouldn’t worry about short-term price volatility and instead focus on long-term growth.
Even Warren Buffett cut his holdings in the Chinese EV manufacturer BYD because he “doesn’t want to compete with Elon in a lot of things.”
Tesla is already one of the top-performing stocks this year with a 139% return, vastly outperforming the S&P 500’s 17% return.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
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