Tesla’s beat-up stock (TSLA) price may have one more move left in it to the downside before buyers could finally emerge with a little gusto.
At least that’s the message from Tesla’s stock chart.
“Tesla is now officially oversold,” said market technician and Fundstrat Managing Director Mark Newton. “I’m looking right down under $100 right before Tesla’s earnings happen right towards the end of the month, and that’s when a lot of my own cycles start to show the chance for a bottom. We could bottom and start to rally into the spring.”
Tesla stock is up 10% so far in 2023 after shares of the EV maker tanked 65% last year.
Analysts point to several factors behind the stunning fall in Tesla’s once seemingly-indestructible stock price.
First, the risk of operational miscues at Tesla has grown as Elon Musk focuses on the newest company in his portfolio, Twitter.
Second, concerns remain around manufacturing issues and the pace of sales for Tesla in China amid an uncertain approach to COVID-19 policies.
And lastly, 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.
Even with these concerns still omnipresent, others on the Street are beginning to warm up to Tesla’s stock in a similar vein to Fundstrat’s Newton.
“We think the Q4 setup is improving,” Citi analyst Itay Michaeli wrote in a new note to clients. “The recent selloff has been driven by legitimate negative developments (December China demand/market share) and other concerns that we don’t think Q4 results alone are likely to resolve. That said, we think weakening sentiment also reflects a lack of visibility on key go-forward items—2023 auto gross margin bridge (price vs. costs), delivery/production outlook, product cadence for new/refreshed vehicles. To that, Q4 results (and the March 1st Investor Day) could provide much-needed visibility/’hand-holding’ on these questions/topics, and that alone could conceivably provide at least a temporary sentiment boost.”