I’m going to talk about a super hot-button topic today and a stock that’s on everyone’s lips… But instead of focusing on why it’s a hot-button topic, I’m going to discuss why it’s often best to ignore the noise when it comes to investing.
Tesla and Twitter CEO Elon Musk is a lightning rod, no doubt…
Do you like Musk? Do you think he’s the worst?
Well, in the world of investing… that ultimately doesn’t matter. We can’t think like that when buying and selling stocks. We must remove emotion from our decision-making because Elon doesn’t know us… Tesla’s stock doesn’t know us… This isn’t personal, it’s about making money.
So we’re going to forget about Musk for a minute while I break down Tesla Inc. (Nasdaq: TSLA) stock from a technical standpoint to see what type of proportional moves we can expect in this beaten-down, former highflyer…
This is about probabilities, statistics and looking at a stock objectively. When you just look at the numbers and remove the emotion, that’s when you become the best version of yourself as a trader.
Can Elon Musk and Tesla Stock Rebound in 2023?
Tesla stock has gotten pounded this year, especially since Musk’s official takeover of Twitter on Oct. 28.
The stock traded below $150 a share on Monday… And if you look at just the past several trading days since we found out Musk was selling shares of Tesla stock to pay for some of his bad Twitter investment, TSLA has gotten crushed.
Since Musk bought Twitter on Oct. 27, TSLA is down about 35%.
Since Dec. 1 and through Monday’s close, shares are down about 25%.
TSLA has also run up hard in the recent past — 1,300% higher from its COVID-19 lows… which is an insane ride if you were long.
The first thing to remember when you see action like this is to understand it’s not normal… That’s an explosive move for any stock to make in less than three years.
So when you look at it in those terms, the pullback is likely to be violent to the downside… while the bear market rallies will be explosive to the upside.
For example, from the 2022 lows of July into mid-August, Musk’s Tesla stock saw about a 45% bounce — in a month.
So we’ve seen massive moves in the stock this year, both up and down, and we’re likely to see more big, tradeable events as we head into 2023 and beyond.
If you’re holding this stock in a long-term portfolio, you may have missed the best chance to sell — for now. But TSLA looks like a good risk-reward trade to the upside because there are a number of interesting spots I think it can hit with a bounce back where I would also lighten up as a holder of the stock.
Check out my short video up top and let’s look at some Fibonacci retracement levels to see what could be next for Elon Musk and shares of Tesla stock.
Are there any topics you’d like to see me cover or questions you’d like answered? Send me an email at jeff@joyofthetrade.com. And be sure to stay ahead of the markets by subscribing to our YouTube channel and our Instagram page for all of the latest! Don’t forget to like, subscribe and leave us a comment!
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*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk.
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