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Should I invest in Tesla (TSLA) as stock price dips below $700?

Should I invest in Tesla (TSLA) as stock price dips below $700? | Invezz

  • Some investors are concerned that the company exposed itself to more volatility with BTC bet
  • Tesla reportedly stopped taking new orders for the lowest-price version of Model Y
  • Shares of Tesla fell today to $619.00 the lowest level recorded in the past 2 months

Shares of Tesla (NASDAQ: TSLA) have continued to move lower as today’s selloff extends below the $700 handle.

Fundamental analysis: Ignore Bitcoin talk and focus on EV sales – analyst

After Tesla spent $1.5 billion to buy Bitcoin, some investors are concerned that the company exposed itself to more volatility. Wedbush analyst Dan Ives believes this is one of the key drivers behind the selloff in TSLA in recent days.


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“Perception is reality on the Street and by Musk and Tesla aggressively embracing Bitcoin (from a transactional perspective as well), investors are starting to tie Bitcoin and Tesla at the hip. While Tesla on paper made roughly a $1 billion on Bitcoin in a month that exceeded all its EV profits from 2020, the recent 48 hour sell off in Bitcoin and added volatility has driven some investors to the exits on this name in the near-term,” Ives said in a note.

Secondly, there are some concerns that Tesla is experiencing weaker demand after the company stopped taking new orders for the lowest-price version of Model Y. Prior to this, Tesla slashed the price of its Model Y standard range SUV, from $41,990 to $39,990.

“We continue to believe the Bitcoin move was a strategic one for the long-term and will have a ripple impact as Square, Mastercard, Microstrategy and now Tesla embrace Bitcoin. That said, Tesla is an EV play entering the golden age of EVs and there is a lingering worry that the Bitcoin sideshow could overshadow the overall EV growth story playing out for Tesla in 2021 and beyond in the eyes of the Street.”

Ives adds that investors should play a long-term game with Tesla and focus on EV unit sales, with China expected to drive growth.

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Technical analysis: Where to buy?

Tesla stock price is trading over 5% lower on the day to dip below the $700 mark. At one point, shares of Tesla fell to $619.00 the lowest level recorded in the past 2 months.

Tesla daily chart (TradingView)

This zone hosts the 100-DMA and, as seen in the chart above, the price action touched the blue line and raced quickly higher. This was an ideal opportunity to invest in TSLA shares and traders should use this pullback to buy Tesla stock.

Summary

Tesla stock price is trading lower today on some demand concerns, as well as investors’ worries related to investing in BTC.


Market analysis


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