TeslaShares have fallen again this week, with the stock down 4 per cent since Monday, down nearly 40 per cent from its January record high. The latest sell-off is related to the sharp drop in the price of bitcoin-Tesla CEO Musk (Elon Musk) said last week that the company would suspend the use of bitcoin to pay for car purchases, but would not sell any bitcoin.
A chart watcher warned that Tesla might see more pain.
"it fell below the trend, and we have to remember that when we analyze stocks like Tesla, they tend to overreact-including rising overreacting and falling overreacting," JC O'Hara, chief market technician at MKM Partners, said on Wednesday.
"when Tesla is on an upward trend, above his 200-day moving average, those overreactions are indeed positive. Let's look back at the January market. But now the trend has changed, falling below the 200-day moving average and long-term upward trend. Therefore, I believe that overreaction will be downward. " O'Hara said.
Tesla's share price has fallen 20 per cent so far this year, making it the worst performer in the s & p. The stock also fell below its 50-day and 200-day moving averages.
At present, Tesla's share price is about $550. it's a good position for a brief rebound, but I'd like to see it overreact to $450. I think this is the right level to re-participate in Tesla's stock, "he said."
The fall in Tesla's share price to $450 means it still has 20 per cent room to fall. The last time Tesla's share price reached this level was in November.
As of press time, Tesla's shares rose 2.51 per cent to $577.63.