Tesla Motors Inc. (NASDAQ:TSLA) sunk to levels it has not been since May, having closed below the psychological $200 level. The downward movement has been accelerated by increased concerns over future competition, which the automaker is poised to face going forward. CNBC’s, Dan Nathan, believes the stock could sink even further in the coming weeks to levels that potential investors can use as a perfect entry point.
Steve Grosso, on the other hand, believes the stock could bounce quickly from the $200 mark based on past trading patterns. The analyst believes the ongoing downturn in China and oil prices concerns could considerably affect the stock price going forward.
“China was supposed to be their hit market, obviously crude has the effect but you know you are dealing with a different type of clientele that should really not have a dramatic impact. I think it is more about competition and more about China,” said Mr. Grosso.
Guy Adami points out that Tesla Motors Inc. (NASDAQ:TSLA)’s pivot point has always been at the $220 level with the ongoing downward trend expected to end at the $180 level; from which a rebound might be experienced. The $180 mark remains in this case a perfect entry point according to Adami.
Valuation concerns have been pounding Tesla Motors Inc. (NASDAQ:TSLA) in the recent months with the entry of more competition raising further doubts on the company’s true value according to Timothy Seymour. At the current trading levels, Nathan maintains technicals are not right to justify an entry point as the stock could sink a further 10%.
“This is a place where Tesla Motors Inc. (NASDAQ:TSLA) should be embracing competition and this is the whole point. If the battery prices don’t come down. They are not for mass market adoption this is another reason why the stock is overpriced,” said Mr. Seymour
The question remains whether the giant electric company will succumb to imminent competition from other automakers who are eyeing the electric space or it will come out stronger. One of the major catalysts that should give the stock the much-needed energy to surge is the production of cheap electric batteries. That should make Tesla Motors Inc. (NASDAQ:TSLA)’s electric cars affordable for mass-market.
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