Friday, January 27, 2023

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

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

Battered Tesla (TSLA) shares may slide further in price before emerging with any enthusiasm.

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

“Tesla is now officially oversold,” Fundstrat CEO and market technician Mark Newton said on Yahoo Finance Live. “I’m looking for a bottom below $100 right before Tesla’s earnings announcement at the end of the month, and this is when a lot of my own calculations show the stock likely to bottom. We could go down and in the spring can start to heal.” she added.

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

Reasons for Tesla’s downfall

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

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

Second, concerns remain over Tesla’s manufacturing issues and the pace of sales in China amid an uncertain outlook for 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 rife, many investors are starting to take heart with Tesla stock in a similar fashion to Fundstrat’s Newton.

He has been optimistic, for example, in a recent note to clients by Citi analyst Ite Micheli. In addition, investor Cathy Wood has taken advantage of the latest decline to add to her already growing portfolio of shares in the electric carmaker.

It’s clear that Tesla shares will be the hero this year, given the level of trading in the first few days of 2023.

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

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

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