Tesla (TSLA) Hits Extreme Oversold Levels

TSLA Tesla

Tesla (TSLA) stock continue the slide for the seventh consecutive trading session hitting the lowest level since August 18, 2020. Sell-off in the technology sector continues and the Nasdaq index is 1.10% lower today while news that electric vehicle NIO cut its delivery outlook for 2022 weighs on the already battered Tesla stock.

There are some reports that the company plans to reduce the production schedule at its Shanghai factory during January, extending the reduced output it began in December.

Analysts fear that the dismal economic environment hit the company, facing soft demand which pushes Tesla to offer $7,500 discounts on Model 3 and Model Y.

The technical picture for Tesla stock is bearish and the RSI oscillator has reached an extremely oversold level down to 16.95. The previous low for the RSI index was at 18.60 back on February 2016. Many traders expect that the extreme oversold conditions would lead to a massive rebound for the stock at least for the short term. Other traders expect that the downtrend is very strong as implied by the RSI and the pressure will continue.

Tesla stock has lost over 68% of its value in 2022, while in the last three months is down over 60%. Many analysts have adjusted the Tesla price target to lower levels in the last months.

On December 22, Wedbush kept Tesla at Outperform and reduced the price target from $250 to $175.

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