Tesla Major Bubble?Tesla has absolutely exploded in value especially since March 2020, which we believe was the beginning of a massive equity bubble. Tesla began trading around $40-80 range for over 6-years.
The vehicles they produce now, they produced in 2017. The Tesla Battery and Tesla Solar Roof were all known back then as they are now. Tesla has not announced anything that should put their stock price at over $900. We know why the stock rallied to $1200, and that was solely the Fed.
Perhaps most shocking is Tesla's P/E ratio which is now over 100X their earnings. This is extreme, and it screams asset bubble. Not even Toyota which is the worlds largest car manufacturer which produces both electric and gasoline vehicles has a P/E of less than 10.
So where do we stand?
We see equities going into a bear market. The FOMC of 1-26-2022 confirmed this when the Fed announced they are continuing their plans for tapering, raising rates, and shrinking their balance sheet. This will adversely affect the stock market and bring equities below a 15% correction, into a bear market.
Key Factors
Buying Volume Weak
MACD Turning Bearish
P/E Ratio: Extremely Overvalued.
Fed Tapering, Raising Rates, and Shrinking Balance Sheet.
50MA is 1/3rd Current Value
100MA is $180 Range
With the biggest buying of equities calling it quits and essentially "selling" this is a stock that I would get out of the way, short but do not expect a continued rally.
