- Tesla sank roughly 8% on Thursday, briefly filling a gap near $400 as broader market panic pressured shares.
- Key levels at $400 and $365 frame the next move, with longer-term investors looking for a stabilizing bounce before reentering.
Tesla has dropped about 8% late in the session here on Thursday. It looks absolutely horrible suddenly. That being said, the $400 level is an area of interest, and the fact that we have a gap that just got filled could entice some buyers.
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Support at Lower Levels Also
However, if this keeps up, we could find ourselves down at the $365 level rather quickly. That's where we meet the 200-day EMA. This is a market that I think continues to see a lot of noise behavior coming into the picture and just pushing things around. It's not really an investment at this point. It has become more or less a risk barometer. Ultimately, this is a market that I think will turn around eventually, but there's just weird panic in the markets overall, and people sell first and ask questions later. Or perhaps I should say the algorithms sell first and ask questions later.
Those who are long-term investors will look at this like they look at any other dip as a potential opportunity. For me, the question isn't so much whether or not I should buy this stock. It's whether or not we get a bounce that's worth buying into to jump back over $400 and prove that as support, or do we see this market break down to $365, where it becomes even more interesting to me? At this point, I am not short of Tesla. I won't short Tesla. I don't even own puts. I learned a long time ago that when your company is one of the biggest holdings in passive investing, then it's really hard to go against it. It's not that you can't short it. It's just that the streets of Manhattan are littered with the bodies of those who tried to.
For myself, I'm just going to let the market come back down, bounce a bit, show signs of life, and put my entry there. If it works, it works. If it doesn't, we wait for an even better setup. That's the beauty of a stock like Tesla.
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