Tesla is incontrovertibly a bubble. Having breached a 1000% return in 2020 and pushing P/E above 1700, this dwarfs Bitcoin 2017 and we should look to Cisco 2000 as a historical guide, which lost 85% of its value over the 12 months following its peak.
Timing tops is difficult business, but given Tesla has recently pushed up 10% on the news that it is recalling 20% of the cars it has ever sold in the US, it is likely that top is near, or perhaps even in. Price action is without a doubt indicative of speculative mania. Look for a third rejection in the 880-900 range which may form a triple top.
On a 6 month horizon, expect Tesla to drop into the 400 range, back toward its 200MA. On the way down, there will likely be a short rally before Q1 earnings followed by a further push downward.
A fair long term price for Tesla is likely much lower still, but we should look to reanalyse in 6 months.
Timing tops is difficult business, but given Tesla has recently pushed up 10% on the news that it is recalling 20% of the cars it has ever sold in the US, it is likely that top is near, or perhaps even in. Price action is without a doubt indicative of speculative mania. Look for a third rejection in the 880-900 range which may form a triple top.
On a 6 month horizon, expect Tesla to drop into the 400 range, back toward its 200MA. On the way down, there will likely be a short rally before Q1 earnings followed by a further push downward.
A fair long term price for Tesla is likely much lower still, but we should look to reanalyse in 6 months.