Tesla was dropping! I got in at around 220. However, within three weeks, I sold for a small profit.
BUT, why did I sell? This is why I'm not holding
TSLA
It's time to buy!
From a technical and historical point of view, buying Tesla right now makes perfect sense. The stock has a history of making significant price gains, is currently oversold, and is testing key support areas, such as the monthly 50 SMA.
A trader or investor who is 100% technical-based, this stock looks like a dream.
However, all the hype hits the floor when the fundamentals are considered...
Meh...
✔ The company has been increasing sales and cash year-on-year until recently
✔ Tesla has plenty of cash and assets. A simple acid test ratio shows liabilities vs. assets around 1:2.
❌ The issue is profit. Both gross and net profit margins have been falling year-on-year. The net profit margin is down from 15% two years ago to 7% last year.
❌ Worse, the current forecasts predict decreased sales and other key financials.
Poor and worsening financials are a clear red flag when buying stocks. Stay away. No matter how appealing the price looks.
Don't get me wrong, I don't think Tesla is doomed, and it may still yield returns. However, I would not be surprised if the stock consolidates or moves lower from here. For me, Tesla is not the significant buy it once was.
BUT, why did I sell? This is why I'm not holding
TSLA It's time to buy!
From a technical and historical point of view, buying Tesla right now makes perfect sense. The stock has a history of making significant price gains, is currently oversold, and is testing key support areas, such as the monthly 50 SMA.
A trader or investor who is 100% technical-based, this stock looks like a dream.
However, all the hype hits the floor when the fundamentals are considered...
Meh...
✔ The company has been increasing sales and cash year-on-year until recently
✔ Tesla has plenty of cash and assets. A simple acid test ratio shows liabilities vs. assets around 1:2.
❌ The issue is profit. Both gross and net profit margins have been falling year-on-year. The net profit margin is down from 15% two years ago to 7% last year.
❌ Worse, the current forecasts predict decreased sales and other key financials.
Poor and worsening financials are a clear red flag when buying stocks. Stay away. No matter how appealing the price looks.
Don't get me wrong, I don't think Tesla is doomed, and it may still yield returns. However, I would not be surprised if the stock consolidates or moves lower from here. For me, Tesla is not the significant buy it once was.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.