TESLA downside targets
Updated
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Yeah yeah yeah, I'm really inviting some comments of FUD etc. Yes, the parallels between US tech in the stockmarket and the crypto market in late 2018 exist. Look I like Elon, and what he is doing. You can't question his results. I also like TESLA, but not at this price. There is no reasonable explanation for why TESLA should be so highly valued that it lost an equivalent value that amounts to 150% of European Banking combined market cap. Why it should be worth more than Toyota (yes I know TESLA does more than make cars).
So anyway, these are some likely short-term sources of support;
The 1:1 extension of the previous sharp correction at $289,
The 0.5 Fib retracement level at $286,
The 200 day MA which will be something around $250 in a couple of weeks,
What I have labelled the wave (4) low at $273,
Failing that the 0.61 Fib retracement level at $235.
The MACD moving averages and histogram are pointing down.
The 30 RSI level is quite a way below.
Will I be a buyer? Nope. I believe in what he is doing, but I stick to value investing principles i.e. The stocks I buy need to generate consistent cash returns and should also be undervalued. No matter how bullish you are on TESLA, a 650% rise in 12 months - without an associated growth in earnings points to people buying DREAMS. When there are no dividend returns underlying the massive gains, gains are more "fragile", peoples hands are weaker, and a lot of people will be shaken out or liquidated (2020 has seen a large inflow of inexperienced traders using leverage - I have definitely been burnt by leverage before).
My belief if that the global economy is entering into the deleveraging phase of a long-term debt cycle. This started to be evident in 2019, the current health crisis will likely deepen the recession. So... where will all the employed, cashed up, buyers of new cars come from? I am more bullish on used car auction houses etc because people need to seriously reduce expenses in the face of higher unemployment and a worsening real economy. Any bad news added on top will send the stock towards the low-end of the range... or even below. Who knows.
Protect those funds.
Yeah yeah yeah, I'm really inviting some comments of FUD etc. Yes, the parallels between US tech in the stockmarket and the crypto market in late 2018 exist. Look I like Elon, and what he is doing. You can't question his results. I also like TESLA, but not at this price. There is no reasonable explanation for why TESLA should be so highly valued that it lost an equivalent value that amounts to 150% of European Banking combined market cap. Why it should be worth more than Toyota (yes I know TESLA does more than make cars).
So anyway, these are some likely short-term sources of support;
The 1:1 extension of the previous sharp correction at $289,
The 0.5 Fib retracement level at $286,
The 200 day MA which will be something around $250 in a couple of weeks,
What I have labelled the wave (4) low at $273,
Failing that the 0.61 Fib retracement level at $235.
The MACD moving averages and histogram are pointing down.
The 30 RSI level is quite a way below.
Will I be a buyer? Nope. I believe in what he is doing, but I stick to value investing principles i.e. The stocks I buy need to generate consistent cash returns and should also be undervalued. No matter how bullish you are on TESLA, a 650% rise in 12 months - without an associated growth in earnings points to people buying DREAMS. When there are no dividend returns underlying the massive gains, gains are more "fragile", peoples hands are weaker, and a lot of people will be shaken out or liquidated (2020 has seen a large inflow of inexperienced traders using leverage - I have definitely been burnt by leverage before).
My belief if that the global economy is entering into the deleveraging phase of a long-term debt cycle. This started to be evident in 2019, the current health crisis will likely deepen the recession. So... where will all the employed, cashed up, buyers of new cars come from? I am more bullish on used car auction houses etc because people need to seriously reduce expenses in the face of higher unemployment and a worsening real economy. Any bad news added on top will send the stock towards the low-end of the range... or even below. Who knows.
Protect those funds.
Note
REKT
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