TSLA: The Reversal
About a month ago, everything had turned around for Tesla. The company was being mercilessly mocked as wave after wave of bad news came out & the selling pushed prices down further and further. However, it was not to last. Now, after that (apparently) temporary scare, we are all the way back near $200.
In 2021, I did not like Tesla very much. The reason was because the valuation was something like 300 P/E. Running some sort of standard cash flow analysis gave a value far lower than the stock price.
I was astonished to find that now, the value is closer to $150 a share. The valuation of the stock has improved dramatically as it has fallen. Of course, $200 is above $150, but it is much closer to being fairly valued than it once was. This means it may not be permanently doomed.
The thing is that a reversal this strong likely needs some sort of strong signal/pattern if it were to be pushed back down again - e.g. a false break above $200 to trap anyone who believes too much in Tesla. It is up about 90% from its lows and has created a substantial bullish formation as a result.
I am not sure it has enough momentum to go too far further at the moment. It has shown a lot of strength & may become more bullish due to the better valuation, so it could be worth it to buy any sort of decline that is coming up.
I would also caution against calling one side against the other at the moment. Tesla stock is highly volatile (obviously) and the market could either toss it out the window or enshrine it in the throne of the new paradigm. You should make sure not to be too emotional if you dare to buy (or short) this stock.
In 2021, I did not like Tesla very much. The reason was because the valuation was something like 300 P/E. Running some sort of standard cash flow analysis gave a value far lower than the stock price.
I was astonished to find that now, the value is closer to $150 a share. The valuation of the stock has improved dramatically as it has fallen. Of course, $200 is above $150, but it is much closer to being fairly valued than it once was. This means it may not be permanently doomed.
The thing is that a reversal this strong likely needs some sort of strong signal/pattern if it were to be pushed back down again - e.g. a false break above $200 to trap anyone who believes too much in Tesla. It is up about 90% from its lows and has created a substantial bullish formation as a result.
I am not sure it has enough momentum to go too far further at the moment. It has shown a lot of strength & may become more bullish due to the better valuation, so it could be worth it to buy any sort of decline that is coming up.
I would also caution against calling one side against the other at the moment. Tesla stock is highly volatile (obviously) and the market could either toss it out the window or enshrine it in the throne of the new paradigm. You should make sure not to be too emotional if you dare to buy (or short) this stock.
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