Tesla Stock Hits 52-Week Low. Here's the Trade.

-- Tesla stock has touched a 52-week low, but is that a cause for concern? Here are the upside and downside levels to know right now. --

By Bret Kenwell, TheStreet.com

Shares of Tesla (TSLA) are in need of a recharge.

Really, though, the problems with Tesla began several weeks ago when it delivered a disappointing quarterly delivery result.

The stock on Oct. 3 tumbled more than 8% in reaction to that report, a move that sent Tesla below $250 support. While the stock tried to reclaim that mark the next day, it went on a five-day skid that sent it below $225.

Then Tesla reported a mixed earnings result after the close on Wednesday, Oct. 19, and the shares fell 6.5% on Thursday.

Even after it again found its footing, the stock was down as much as 7.4% on Monday.

The stock was hitting 52-week lows after a surprise price cut raised questions about current demand. It also comes after Chinese equities fell hard in today's session.

Trading Tesla Stock at 52-Week Lows

Daily chart of Tesla stock

Chart courtesy of TrendSpider.com

On the chart above, notice how Tesla stock broke below $250, then decisively lost the $225 level as well, as the latter became clear resistance.

As we test new lows, I like the responsiveness we're seeing in the low-$200s. Ahead of the earnings, this was a key area for the stock.

But the longer it builds below $207, the more concerning the charts start to look.

On the upside, the bulls need to see three things.

First, the stock needs to reclaim $207. Second, they need it to reclaim the 10-day moving average, which has been active resistance.

While doing those two things may get the stock up to the $225 to $227 zone - a healthy 14% rally off the low - it will be hard for Tesla bulls to enjoy a sustained rally unless the shares can reclaim $225 as well.

On a bigger-picture outlook, that could open the door to $250, then $262.50.

That all said, the charts are struggling at this point. If Tesla stock needs to go lower, sub-$200 could put the low-$180s in play.

After a major breakout over $165, Tesla stock twice found support in the low-$180s in 2021. If the shares are to go lower, this could be a key support area over the next few weeks.

From TheStreet.com