It was another turbulent day-after-earnings for Tesla.
The stock shed nearly 14% on Thursday, following a worse-than-expected earnings loss in the second quarter and a revenue miss.
Tesla has had double-digit price drops 10 times since its IPO in June 2010, according to data from the Kensho data tool. In eight of those cases, the stock recovered nearly all of its losses just two weeks later.
But Miller Tabak's Matt Maley says this time might be different. He argues that Tesla is close to falling below a "line in the sand," which could mean "real, real problems."
His case is based on the stock trading patterns. In the past, after significant downturns, Tesla was able to reverse course, regain its old highs, and then push higher. For instance, when Tesla saw sell-offs in 2014, 2015, and 2016, the stock bounced back to the $275 - $285 level. A similar scenario played out in 2017 and 2018, when the stock climbed back to the $350 - $375 level after steep slides, according to Maley.
But the current setup is different. Shares of the electric vehicle maker sank to a 52-week low level of $176.99 last month, and only managed to regain 50% of that slide — closing at $264.88 on Wednesday — before getting whacked on Thursday after earnings. It finished the day at $228.82.
Maley acknowledged that it might sound "crazy" to call a 50% gain a "failed rally," but from a technical perspective, that's exactly what it was.
"The most recent sell-off took it down quite a bit and its bounce has not taken it back to its all-time highs and it's reversing lower now, and that's a big problem," he said Thursday on CNBC's "Trading Nation." It's a "big problem" when a stock fails "to regain a key level," he added.
The stock's $228.82 close on Thursday also puts it firmly below the $250 level, which is significant since $250 was key support for the stock in the past.
"You saw in 2018 it bounced off it [$250] in both May and October of last year in a very, very strong way," he said.
The stock is now approaching Maley's crucial level.
"The line in the sand: the lows from June, which is also the lows from early 2016. That's just below $180. You break below that and you've got real, real problems. A lot of confidence is going to come out of that stock," he said.
Tesla has always been a polarizing stock. There are those who are true believers in Elon Musk and his mission. There are also the perpetual skeptics.
Joule Financial's Quint Tatro says he used to be a believer, but after multiple disappointing quarters he sold his position. It's not a "fundamental story," he said, and he no longer buys the story of optimism and growth. To him the stock is simply a "painful existence."
"If you're a long-term believer in this company and Elon Musk and you want to buy some shares as a gamble, today maybe is the day. But as a fundamental investment it's still a no-touch here," he said on the show.