Skip to content

Tesla stock fell in a correction amid a tug of war between bulls and bears

Tesla stock fell in a correction amid a tug of war between bulls and bears

Tesla (NASDAQ: TSLA) stock price fell sharply as shares reached the overbought territory after a 60% bull-run since the S&P 500 announced to add Tesla to the broader market index. Its relative strength index has reached 78 levels on Wednesday, while stocks are considered overbought when the index hits 70.

The latest selloff is initially supported by a network outage, but it is not yet clear that an outage would lead to any problems with vehicles. The reports show that users are unable to connect to their vehicles via the mobile app.

Tesla stock performance. Finviz chart

In addition, shares of the largest electric vehicle company extended the downtrend in Thursday trading as court-ordered Elon Musk company to stop cutting forests in order to protect hibernating snakes and lizards.

Tesla seeks to build its first European Gigafactory in Germany with plans of commencing production from fiscal 2021.  

JPMorgan says Tesla stock is overvalued

In a tug of war between bulls and bears, JPMorgan doubles down on a bearish Tesla stock performance forecast.

Although JPMorgan analyst Ryan Brinkman appreciated the trader’s strategies of buying Tesla stock on S&P inclusion news, the analyst says Tesla stock is dramatically overvalued. He says Tesla stock trades at 1,325x LTM P/E and at 291x 2020E and 175x NTM.

The analysts also noted that Tesla’s earnings forecasts for the upcoming years declined when compared to the share price rally of 800% in two years.

“The company is led by visionary leadership, backed by a management team with solid functional strength. Although both technology and execution risk seem substantially less than was once feared, expansion into higher volume segments with lower price points seems fraught with greater risk relative to demand, execution, and competition,” Brinkman said.

Bulls are optimistic for more gains

Several other prominent market pundits including Wedbush have presented bullish thesis with buy ratings. Wedbush has set a $1,000 price target for Tesla stock amid the company’s strategy of diversifying its revenue base.

Besides Tesla’s stock performance, people have been appreciating the rocket test that Musk’s Starship rocket SN8 company SpaceX plans to use for sending people to Mars. However, the rocket exploded in a test after successfully lifting off and flying several miles high on Wednesday.

Related video: SpaceX prototype Starship rocket SN8 explodes during a test flight.

SpaceX prototype Starship rocket SN8 explodes during a test flight

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in 70+ cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

Read Next:

Weekly Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Disclaimer: The information on this website is for general informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. This site does not make any financial promotions, and all content is strictly informational. By using this site, you agree to our full disclaimer and terms of use. For more information, please read our complete Global Disclaimer.