Tesla Inc. stock has experienced a bumpy ride since Elon Musk started publicly supporting various causes and making political comments worldwide. Despite weak earnings and challenging quarters ahead, the stock only declined 3% last month. In previous months, it experienced double-digit monthly drops with high volatility.
A Bumpy Ride or a Golden Opportunity?
Fundamentals
If you don’t currently have Tesla stock in your portfolio, it might be a good time to consider adding it. The company has already given the market and investors a rough outlook, and overall sentiment toward Tesla isn’t great from an investor’s perspective. This means that any positive news in the future could quickly boost confidence in the company and its stock.
- Tesla is testing Robotaxi and is focusing heavily on it.
- Elon Musk is back in the game, hopefully without further political distractions.
- The company has started limited production of more affordable models, with deliveries expected in the second half of this year.
Technicals
Tesla stock is currently trading around $300 and has multiple support levels at this price range. The 200-Day Moving Average stands at $321.7, offering a favorable risk-reward opportunity to enter the stock at current levels, unless a negative catalyst pushes the price below its multi-year support.
Downsides
However, there are potential downsides to consider:
- One political comment from Musk or any further move from his political party could ruin everything, as his political statements continue to frustrate investors.
- Sales are still plunging, with declines in France and Denmark for the seventh straight month, showing that Tesla is still struggling.
- Many investors remain concerned about the company’s turnaround strategy.
- Growing competition is another challenge, and if Tesla’s market share keeps shrinking, especially with BYD expanding rapidly, it will likely impact the stock negatively.
Despite these challenges, it’s worth noting that Musk has a history of surprising the world, and Tesla could stage a strong comeback. As with any investment, it’s essential to weigh the potential risks and rewards before making a decision.