Tesla stock tumbled just over 8% to 180.19 last week, skidding to a fresh bear-market low of 176.55 on Friday. That followed declines of 5.5% and 9.2% in the prior two weeks, continuing a sharp slide since late September.
It's a tough environment for aggressive growth stocks, especially EV makers. Tesla has some demand concerns as production swells and competition heats up. It's cut prices in China, with more cuts likely as subsidies end on Dec. 31. Meanwhile, the "Twitter circus" remains a concern. CEO Elon Musk's chaotic reign in just three weeks risks damaging the Tesla brand.
Tesla is still growing at a strong pace while new U.S. subsidies should bolster demand at home in 2023.
But TSLA stock has gone on multiyear stretches of going sideways or down. So while the EV giant could rev higher again, investors should wait for the chart to set up again. That could take a long time.
The stock market rally had a down week. After the prior week's big CPI-fueled surged, the indexes initially rose, but then pulled back from Tuesday's highs, testing key levels on Thursday. But stocks rebounded modestly from Thursday's lows.
A market pause wasn't a big surprise given the sharp recent gains, and with the S&P 500 index approaching its 200-day line. Holding support areas is a positive, while the Nasdaq's 21-day line is about to cross above the 50-day. Assuming the indexes hold those levels and eventually move higher, this would be a constructive week for the major indexes.
In general, I would be cautious in entering Tesla now as there are further downsides to the stock. I would be holding on to cash for now till the recession hits properly.
DYODD
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