Where Is the Bottom for Tesla?
Tesla stock is looking for a bottom, but is it close?
Tesla’s run to an $800 billion market cap was excessive. That’s no secret. But finding the bottom in the stock is proving tough so far.
It doesn’t help that, once again, we have Elon Musk stirring the pot when it comes to social media, Bitcoin, Dogecoin and other intermingling between his businesses and cryptocurrencies.
To be honest, I’m not really interested in the fundamental or valuation-based debates. How Tesla is a total fraud on one hand or going to dominate the world on the other hand.
I’m on here for the chart.
Trading Tesla Stock
Like other frothy stocks, Tesla was beaten down from mid-February to early June, falling about 40% — which is the threshold where I like to put money to work in high-quality, market-leading growth stocks.
That led to a 40% bounce back over the key $700 level. However, once Tesla filled that gap near $781, it retreated and failed to hold $700 as support. Then its key moving averages failed, followed by a break of uptrend support.
There was plenty of time to bail on this stock before its recent decline, as it has now fallen in five of the last six sessions.
What Now: Tesla stock is deliberately (and stubbornly) holding below the 200-day moving average and the March 30th low at $591. If it can reclaim $591, then $600, we’ll have a low to measure against.
On the upside, that would have me targeting the 10-day moving average, then the 10-week moving average.
On the downside, a close below the recent low near $559 has me looking at the March low at $539 and the 50-week moving average. If these marks fail to buoy Tesla, then the $500 breakout level may be in play.
Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.