Wow!!! What a run Tesla had since it broke out on October 25, 2019. If you didn’t buy it then, obviously you feel like kicking yourself. Don’t worry. Because, you will have another chance or it is already on the horizon.
On pure TECHNICAL analysis, TSLA demonstrated a ‘Climax Top’ on Feb 4. It went as high as 969 and then fell down to close at almost 40% of the day’s range. It is never a good sign for a stock flying that high. Look at the charts to observe the climax top here.
This should remind you of TLRY that fell in similar fashion. Watch our analysis here on TLRY.
Opportunity to buy seems to be arriving though. Watch out for the levels at 690 and 604. Tesla stock should find support at these levels as it tests major moving averages here. If you have been looking for a better entry point, you can place buy orders at these levels and hope for the best. Interestingly, 50% retracement from a low of 260 to a high of 969 is right around 600 region.
Will it continue to sell lower? Our honest answer– Why not??? If sellers want to realize the massive profits, why not. That is why you need to look at fundamental analysis here.
On ‘FUNDAMENTAL ANALYSIS’, you can see that TSLA expects to earn almost $8.50 in 2020. So, at current levels (trading at 750 currently), you are only paying 88 times earnings. Forward to 2021, TSLA is only trading at 50 times next year earnings. If you are able to buy Tesla at 600 levels, you would only be paying 60 times 2020 earnings or 41 times 2021 earnings. If TSLA can continue to grow its earnings at 50%, then buy price around 600 does not seem bad at all. Also, considering the momentum it generates, TSLA could be trading a lot higher soon.
KEEP CHECKING US OUT AS WE KEEP UPDATING HERE WITH NEW POSTS/ IDEAS TO UPDATE ON THE MARKET TRENDS.