After the dismal drop on earnings report day, what is the usual trajectory for Tesla?

Overnight, Tesla's stock price plummeted more than 9%, marking the third consecutive time that the stock price has dropped after the release of Tesla's earnings report.

After the announcement of its first-quarter performance, Tesla's stock price fell by 9.7%. Following the second-quarter performance announcement, it continued to decline by another 9.7%. After the disappointing third-quarter earnings were announced on Wednesday, Tesla's stock price dropped by 9.3% on Thursday, closing at $220.11.

On Thursday, the S&P 500 and Nasdaq Composite Index fell by 0.9% and 1% respectively.

The issues with Tesla's earnings report lie in its profit margin and pricing. Tesla's price reduction led to an operating profit margin of less than 8%, a nearly 10 percentage point decrease compared to the same period last year. Tesla CEO Elon Musk's comments during the earnings conference call also sounded pessimistic, as he mentioned that high interest rates were damaging demand and the economy.

However, historical experience shows that Tesla may experience a moderate rebound in the near future.

According to statistics, Tesla's stock price has averaged a 0.4% increase on the first day after a dismal drop on earnings report day, with a total of 7 increases. After a significant decline for a week, the stock price has averaged a 1.4% increase, one percentage point higher than the first day's rebound.

From a technical perspective, Frank Cappelleri, the founder and market technical analyst of research firm CappThesis, examined the trend chart of Tesla's stock price to understand the levels at which investors have entered the market recently. He stated that there are several key levels worth investors' attention:

At the beginning of this year, Tesla's stock price was around $123 per share, reaching a peak of over $290 in the middle of the year. When it subsequently fell below $222, which was a level Cappelleri was paying attention to, traders would consider buying.

There are two other levels to note: one is $217, which corresponds to the high points in February and June; the other is $214, which is the 200-day moving average. If it falls below $214, it will bring more pain to investors.

On the other hand, Tesla's investors have become accustomed to the volatility brought about by earnings reports. On average, Tesla's stock price has a fluctuation of around 7% after the release of its earnings report. In comparison, Apple's stock price has an average fluctuation of around 4%.Interestingly, Tesla's stock price tends to decline 58% of the time after the release of its earnings report, while Apple's stock price tends to rise 58% of the time after its earnings report.

In the past 41 quarters, Tesla has underperformed expectations 13 times, while Apple has done so 3 times.