Tesla, Inc. (NASDAQ:TSLA) market value has fallen by more than 30% in recent months

Tesla, Inc. (NASDAQ:TSLA) market value has fallen by more than 30% in recent months

Tesla, Inc. (NASDAQ:TSLA) market value has fallen by more than 30% in recent months

In March, the NYU professor Scott Galloway made a bold prediction at South by Southwest: This will be the year that Tesla begins to unravel.

Two months later, his claim is starting to look like it could come true. Shares of Elon Musk’s electric-car maker have plunged more than 35% to trade below $US200, as Wall Street analysts worry that underlying demand for the vehicles may have disappeared.

Galloway, who correctly called Amazon’s Whole Foods acquisition back in 2017, is now predicting a Tesla acquisition.

“I think investors are finally getting fed up,” he said on a Recode podcast with Kara Swisher published on Friday. “My prediction is within 12 months Tesla is sub $US100 per share and it probably gets acquired because there’s real value there.”

Tesla did not immediately respond to a request for comment.

The big question is by whom

Most automakers don’t have enough cash on hand to be able to shell out the tens of billions of dollars for Tesla.

“Even if it goes from $US35 billion to $US17 billion … there’s maybe a couple companies that could buy it: Maybe Toyota, maybe Daimler Benz, but that’s a bet the ranch kind of bet,” Galloway said, adding that bids could include a premium that would make the deal’s value total between $US20 billion to $US25 billion (still less than Tesla’s current $US34 billion market value).

Instead, he’s predicting a tech buyout. Rumours that have circulated for years that Apple once made a bid for Tesla.

“The guys that could acquire it, that have the balance sheet, are the tech companies but they don’t want to go into a low-margin business,” Galloway added. “So would Google start to see the car as a platform for more advertising maybe?”

Amazon is also interested in the automotive industry, CEO Jeff Bezos said recently. The company has made a substantial investment in Rivian, a new company building electric SUVs, and has plenty of cash to make another buy ($US17 billion on its most recently disclosed balance sheet).

“It’s a great brand, it’s a great product,” Galloway said of Tesla, adding that the major four American automakers likely won’t buy it: “They don’t have the money.”

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 247.86.

The projected upper bound is: 208.45.

The projected lower bound is: 165.48.

The projected closing price is: 186.97.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 20.6175. This is not an overbought or oversold reading. The last signal was a buy 0 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 22.85. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 20 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -98. This is not a topping or bottoming area. The last signal was a buy 0 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 10 period(s) ago.

Rex Takasugi – TD Profile

TESLA INC closed down -1.930 at 188.700. Volume was 0% above average (neutral) and Bollinger Bands were 65% wider than normal.

Open High Low Close Volume___
191.200 195.000 187.850 188.700 10,312,901

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 208.16 251.62 298.03
Volatility: 58 55 71
Volume: 14,803,023 11,316,960 9,646,570

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

TESLA INC is currently 36.7% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of TSLA.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on TSLA.O and have had this outlook for the last 31 periods. Our momentum oscillator is currently indicating that TSLA.O is currently in an oversold condition. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

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