Tesla may be a trading buy if it nears $100/share, technical strategist says
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Tesla (NASDAQ:TSLA) may be a trading buy if it nears $100 a share, Fundstrat technical strategist Mark Newton said after predicting in November that the EV maker could fall to $106/share. He expects the shares will be lower from their current price by the end of the month.
“When it gets down near $100, for me, by the end of the month, there will be some things that will line up to suggest the stock is a trading buy and it could have a very sharp bounce,” Newton said in an interview Wednesday with CNBC. “But I think it’s just premature to think that level is right here.”
“I do believe the risk reward for long-term investors is getting better, but technically it’s very difficult to stick one’s neck out and say here is the low based on fundamentals or anything,” Newton said.
Newton said in early November that he saw a potential $165/share potential downside for Tesla, though the EV maker may hit $109 in an “extreme case.”
“I’m not a real buyer right now,” Newton said on Wednesday. “I would be looking by Tesla’s earnings at the end of the month, there is going to be some opportunity I believe. If the stock falls about 10% more then it’s going to be a very good risk reward and I think the upside could be 30% to 50%.”
“For intermediate term investors we almost need to get up above the area it where it broke down, $206, to really think that we are going to start a much larger rally, which is almost a double,” Newton explained.
Tesla (TSLA) shares rose 5% on Wednesday after slumping 12% on Tuesday after the electric vehicle maker’s Q4 deliveries report, which came in below expectations.
“I just view it still as being a very risky time to step in and buy just yet for those with short time frames,” Newton added.
Earlier Wednesday Wedbush’s Dan Ives said a Tesla sell-off could continue if Musk remains distracted.
