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Tesla's stock price has halved, can we buy at the bottom

3/11/2025 08:26pm

``` The deep research logic is organized as follows: Okay, let's tackle this question about whether Tesla's stock has hit the bottom and if it's a good time to buy. The user is asking if they should buy at the current price, which has halved. First, I need to look at the data provided in the references and background. Starting with the recent price changes, Reference 1 shows that Tesla's pre-market percentage change on March 11 was 1.04%, but the post-market isn't available. The closing price on March 10 was $222.15, down 15.43% from the previous close. That's a significant drop. The two-week percentage changes (Reference 2) show volatility, with days of both gains and losses, but the overall trend seems downward, especially the -15.43% on March 10. Looking at technical indicators from Reference 3 and 38, the MACD is -13.06, which is bearish, the RSI is 11.45, indicating oversold conditions, and the KDJ is 3.26, also oversold. The Bollinger Band is at 310.88, which is above the current price, suggesting the stock is below the lower band, a potential buy signal. However, these are mixed signals. The RSI and KDJ being oversold might suggest a short-term rebound, but the MACD is still negative. Fundamentally, References 4, 5, 7, 9, 11, 13, 17, 18, 21, 22, 23, 24, 25, 26, 33, 34, 35, 36, 37 discuss various issues. Sales in China and Europe have plummeted, with February 2025 sales down 49% in China and 45% in Europe. Analysts like UBS have cut price targets, citing weak deliveries and profit margins. Elon Musk's political involvement is causing brand issues, especially in Europe and China, leading to protests and decreased sales. The company's valuation is still high with a P/E of 111.41, which is concerning. However, some analysts like Wedbush remain bullish on Tesla's AI and robotics potential. Institutional activity (References 10, 27, 28, 29, 30, 31) shows mixed moves. Some institutions are buying, like BlueStem Wealth and Sims Investment Management, while others are selling, like Meitav Investment House. Insider selling, such as Kimbal Musk's $44 million sale, adds to bearish sentiment. The user's profile mentions interest in WallStreetBets, which often looks for oversold opportunities. The technical indicators showing oversold conditions might align with that sentiment. However, the fundamental issues are significant, and the high valuation despite declining sales and profits is a red flag. Considering all this, the answer should balance the technical oversold signals with the fundamental challenges. The stock might be oversold in the short term, offering a potential rebound, but the long-term outlook depends on Tesla's ability to recover sales, especially in China and Europe, and Musk's focus on the company. The user should be cautious, perhaps considering a small position with a stop-loss, or waiting for more positive news. ``` **Tesla's stock has fallen sharply, but whether it has "bottomed" depends on a nuanced analysis of technical indicators, fundamentals, and market sentiment. Here’s a structured breakdown:** --- ### **1. Technical Indicators Suggest Oversold Conditions** - **RSI (11.45)** and **KDJ (3.26)** indicate extreme oversold territory, historically a potential buy signal . - **MACD (-13.06)** remains bearish, signaling sustained downward momentum . - **Bollinger Band (310.88)** shows the stock trading below the lower band, suggesting a possible short-term rebound . |code|Ticker|Name|Date|RSI|KDJ|MACD|market_code| |---|---|---|---|---|---|---|---| |TSLA|TSLA.O|Tesla|20250310|11.4475|3.2635|-13.0627|185| |code|Ticker|Name|Date|Boll|RSI|KDJ|MACD|market_code| |---|---|---|---|---|---|---|---|---| |TSLA|TSLA.O|Tesla|20250310|310.8755|11.4475|3.2635|-13.0627|185| --- ### **2. Fundamental Challenges Dominate** - **Sales Collapse**: - China sales fell **49% YoY** in February 2025 . - European sales dropped **45% YoY** in January 2025 . - **Profit Margins Under Pressure**: - UBS slashed Q1 2025 delivery forecast to **367,000 vehicles** (-26% QoQ) and cut EPS estimates by **30%** . - Auto gross margin projected to drop to **10.3%** (vs. 16.4% in Q1 2024) . - **Political Risks**: - Elon Musk’s involvement in the Trump administration has triggered protests and brand damage in Europe and China . --- ### **3. Valuation Concerns vs. Long-Term Potential** - **High Multiples**: - P/E ratio of **111.41** and P/B ratio of **10.03** suggest overvaluation relative to peers . - GF Value of **$259.15** implies **modest undervaluation** . - **AI and Robotics Catalysts**: - Analysts like Wedbush highlight Tesla’s potential in autonomous driving and robotics, which could justify premium pricing . --- ### **4. Institutional and Retail Sentiment** - **Mixed Institutional Activity**: - Some firms (e.g., BlueStem Wealth, Sims Investment Management) are accumulating shares . - Others (e.g., UBS, Morgan Stanley) remain cautious, citing delivery risks . - **Retail Sentiment**: - WallStreetBets-style momentum traders may view oversold conditions as a buying opportunity, but Tesla’s volatility demands caution . --- ### **Conclusion: A High-Risk Opportunity** Tesla’s stock is oversold technically, but its fundamentals (sales collapse, margin erosion, political risks) and high valuation create significant downside. **Short-term traders** could capitalize on a rebound, while **long-term investors** should wait for clearer signs of operational turnaround (e.g., improved China sales, FSD adoption). **Key Levels to Watch**: - **Support**: $200 (psychological floor). - **Resistance**: $250 (50-day moving average). |code|Ticker|Name|Date|Closing Price|market_code| |---|---|---|---|---|---| |TSLA|TSLA.O|Tesla|20250310|222.15|185| |code|Ticker|Name|Date|Percentage Change|market_code| |---|---|---|---|---|---| |TSLA|TSLA.O|Tesla|20250311|-15.426200175124684|185| **Final Advice**: Use dollar-cost averaging to mitigate risk, and monitor Tesla’s Q1 2025 delivery data (due March 2025) for confirmation of a turnaround.