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Tesla shares already see light at the end of the tunnel for some analysts: “They are officially oversold”

Tesla shares

Tesla shares are “now officially oversold,” says a Fundstrat market technician (Photo: CFOTO/Future Publishing via Getty Images)

The price of battered Tesla (TSLA) shares may plunge further before they can emerge with any enthusiasm.

At least that is the message that the Tesla stock chart leaves us, according to some experts.

“Tesla is now officially oversold,” Fundstrat CEO and market technician Mark Newton said on Yahoo Finance Live. “I’m looking at just below $100 ahead of Tesla’s earnings announcement towards the end of the month, and that’s when a lot of my own calculations show the possibility of a stock bottoming. We could bottom out and start to recover in spring,” he added.

Tesla shares are up 10% so far in 2023 after plunging 65% last year and 75% from their all-time intraday high, recorded in November 2021.

Reasons for Tesla’s fall

Analysts point to several factors behind the surprising drop in the price of Tesla’s shares, which once seemed indestructible.

First, the risk of operational failure at Tesla has increased as Elon Musk focuses on the newest company in his portfolio, Twitter.

Second, concerns persist around Tesla’s manufacturing issues and sales pace in China amid an uncertain approach to COVID-19 policies.

And finally, competition in the EV space in the United States has only intensified this year, raising the risk of slowing growth for Tesla in 2023 and beyond.

more optimistic

Even with these concerns still pervasive, many investors are starting to take heart with Tesla stock in a similar vein to Fundstrat’s Newton.

He has been optimistic, for example, in a recent note to clients by Citi analyst Itay Michaeli. In addition, investor Cathie Wood has added to her already bulging portfolio of shares in the electric car maker, taking advantage of the latest declines.

What is clear is that Tesla’s shares will be the protagonists this year in view of the trading levels that they have experienced in some of the first days of 2023.

More than $25 billion worth of Tesla shares changed hands in the first trading day of the new year amid the sustained decline in the electric vehicle maker’s share value.

Stock trading volume for the company headed by Elon Musk was the highest among all members of the S&P 500 Index and nearly equal to the combined total for Apple, Microsoft and Amazon.com.

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