巴伦周刊：Tesla Stock Is Falling Again. It’s Now ‘Attractive,’

 

T esla stock is falling Thursday. Investors were already feeling and battered and bruised. Dealing with volatility, however, is the price of admission for Tesla stock. But after a brutal selloff, shares are looking attractive again to one market technician.

Coming into Thursday trading, Tesla stock was down for five consecutive days, losing almost 20% over the span. Shares were down 40% from all-time highs reached in mid-December, wiping out more than $600 billion in market value. 

The correction has been painful. It may have gone far enough, though. “Tesla looks attractive following its break below $300 from a counter-trend perspective,” wrote Fundstrat head of technical strategy Mark Newton in a Wednesday note. 

He looked prescient, at least based on early Thursday trading. Tesla stock was up 1.6% in premarket trading at $295.70. The gains didn’t hold, though. Shares were down 2.5% to $283.58 in Thursday morning trading, while the S&P 500 and Dow Jones Industrial Average were down 0.3% and up 0.3%, respectively.

Newton isn’t making a fundamental call on Tesla stock. He’s looking at stock charts, and trading history, to get a sense of where investors have bought and sold shares in the past

 

Once Tesla fell below $315, the stock charts said it would reach $275 to $280, where shares looked to have significant technical support. Said another way, investors were likely to step in and buy the dip around $275. Tesla stock got to within a few dollars of $280 on Wednesday. 

What’s more, Tesla stock is “approaching a Fibonacci-based 61.8% retracement of its entire rally from April 2024 to December 2024,” added Newton. That’s a mouthful, but it means that shares have given back slightly more than a third of its rally from its April low.

“Overall, I like the risk/reward for buying dips in Tesla on this latest dip,” wrote Newton. That’s a relief given the stock will likely be down for nine of the past 11 weeks since peaking in mid-December. 

Using stock charts might feel a little odd to fundamentally minded investors. They tell a story though. In Tesla, they say investors got a little ahead of themselves after the presidential election, focusing on only the potential positive from CEO Elon Musk’s relationship with President Donald Trump.

Some risks have emerged as Tesla sales faltered in January around the globe. Musk’s politics might finally have turned off Tesla core buyers—politically left-leaning consumers looking to go green. 

Now the fear might be overdone. Many Wall Street analysts estimated that a second Trump term was worth between $50 and $100 a share for Tesla stock. (Tesla stock was about $250 on Nov. 5.) Lower tax rates, proximity to the president, and federal rules allowing for the faster deployment of self-driving cars were reasons cited. 

As fears subside, Tesla stock can move back into the mid-$350s. 

Fundamentals will have to take over for it to go higher from there. Investors want to see higher EV sales in 2025—driven partly by a new lower-price model—and for the company to start a self-driving robo-taxi business.

Those two things will help determine the stock’s position at the end of the year. For now, the outlook is better in the coming weeks. Shellshocked investors will have to be content with that.