Tesla Stock Price Gets Downgraded. Is Tesla or EV ETF a BUY?

Tesla stock (NASDAQ: TSLA) made news this week being named the largest car company ever in America, but it needs to go up 50% to 75% if you consider inflation.   The real question investors are asking themselves, “Is Tesla A Buy.”  Well maybe.  Like most stocks, there is the business side and the market side.   A brief look at the market shows that Tesla’s shares 39.9%  took the checkered flag from Ford’s 10.5%, Honda’s and GM’s flat, and Toyota’s 15.7% annual stock gains.

The Electric Vehicle Market – EV

The electric vehicle (EV) is increasing with a projection of 20% of all cars sold globally in 2025. Tesla is the most recognized name brand in this market, but all manufacturers are building electric vehicles. Even Ford is releasing an electric version of its F-150 call the Rivian R1T. The EV market is expanding and still up to a leader.

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EV ETFs

One of the business issues with Tesla is consistent failure to meet sales and manufacturing goals.  For investors that are looking to invest in the EV market, but don’t want the risk of business risk of Tesla, there are several new EV etfs to consider.   I recommend investors look at: Amplify Advanced Battery Metals and Materials ETF BATT, Global X Autonomous & Electric Vehicles ETF DRIV, Innovation Shares NextGen Vehicles & Technology ETF EKAR, KraneShares Electric Vehicles and Future Mobility Index ETF KARS, and Global X Lithium & Battery Tech ETF LIT

Tesla Stock Share Performance

Tesla shares updated their 52-week high following yesterday’s trading session, adding more than 17.5% since the end of December amid corporate news. In Q4 2019, the company delivered 112K electric cars, exceeding market expectations. In addition, the construction of Gigafactory in Shanghai was completed in record time.Over the past week, Tesla shares rose by 17.64%. Over the same period, the S&P 500 Index grew by 0.69%.

Recently some of Tesla’s biggest fans such as Baird analysts Ben Kallo and David Katter have downgraded Tesla to a neutral rating. “We are moving to the sidelines, admittedly battle-weary after a hard-fought several years, including [approximately] 20% outperformance over the last year,” said the team, who spoke of “contentious arguments with (evidently) high-conviction bears.”

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The Stock Market Today

Investors are focused on yesterday’s statements by US President Donald Trump with a commentary on the situation in the Middle East, which were more peaceful than the market expected. Trump noted that Washington could introduce additional economic sanctions against Iran but did not mention military operations. Moreover, the president called for a new nuclear deal with the Islamic republic. However, experts believe that Iran’s response to the assassination of General Soleimani will not be limited to demonstrative rocket attacks on American targets in Iraq. Most likely, Iran will continue to strike at American infrastructure with the help of Shiite-controlled units throughout the Middle East, so the detente is only temporary.

During the day, US Initial Jobless Claims data will be released. It is predicted that the figure will decrease from 222K to 220K. Also, the market is waiting for the speeches of a number of Fed members: Richard Clarida, Neel Kashkari and John Williams. They may hint at further actions of the American regulator. USD is now strengthening against its main competitors – GBP, JPY, and EUR.

Oil Prices Stabilize

Oil quotes stabilized after a significant downward correction on Wednesday.  Yesterday, the prices decreased due to US President Donald Trump’s statements. He announced the possibility of new sanctions against Iran but did not declare military operations against this country. This statement was perceived by the market as a consequence of easing tensions between Iran and the United States. Also, pressure on quotes was exerted by data from the API report, according to which US oil reserves increased by 1.164 million barrels, distillate reserves increased by 5.330 million barrels, and gasoline reserves grew by 9.137 million barrels. Currently, the market situation remains uncertain. Investors are waiting for the situation in the Middle East to develop, fearing that Iran will continue to attack American targets through controlled groups, despite restrained statements from Washington. According to CNBC, owners of oil and gas vessels are preparing to increase insurance bills paid for their passage through the Strait of Hormuz.

TSLA tesla stock chart breakout
TSLA tesla stock chart breakout

Tesla Stock Support and resistance

The company’s shares continue to show a pronounced upward trend. The issuer has renewed the key extremes. Currently, #TSLA quotes are testing a round level of 500.00. The level of 450.00 is the nearest support. There is potential for a correction after a long rally. Indicators signal the strength of buyers: the price has fixed above MA (50) and MA (200); MACD is in the positive zone. It is better to open the positions from the key levels. A comparative analysis of the multiples of the company and competing companies in the industry indicates the neutrality of #TSLA.
Resistance levels: 500.00.
Support levels: 450.00, 405.00, 360.00.

Tesla Stock Trading tips

Long positions may be opened after the price consolidates above the level of 500.00. The closing of the profitable positions is possible at the levels of 540.00, 570.00 and 600.00. Stop loss – 460.00. Short positions may be opened after the price consolidates below the level of 450.00 with the targets at 380.00–350.00. Stop loss – 490.00. Implementation period: 3 days.

Tesla Stock Recommendations

Jan-09-20 Downgrade Robert W. Baird Outperform → Neutral $355 → $525
Jan-07-20 Reiterated Credit Suisse Underperform $200 → $340
Jan-02-20 Reiterated Canaccord Genuity Buy $375 → $515
Dec-30-19 Reiterated Cowen Underperform $190 → $210
Dec-26-19 Reiterated Wedbush Neutral $270 → $370
Dec-06-19 Reiterated Morgan Stanley Equal-Weight $440 → $500
Nov-26-19 Downgrade China Renaissance Buy → Hold $346
Nov-11-19 Reiterated Jefferies Buy $300 → $400
Oct-29-19 Downgrade ROTH Capital Neutral → Sell $249
Oct-25-19 Reiterated Barclays Underweight $150 → $200
Oct-24-19 Reiterated RBC Capital Mkts Underperform $190 → $220
Oct-24-19 Reiterated BofA/Merrill Underperform $225 → $235
Oct-03-19 Reiterated Wedbush Neutral
Oct-03-19 Reiterated Nomura Neutral
Oct-03-19 Reiterated Needham Underperform
Oct-03-19 Reiterated Morgan Stanley Equal-Weight
Oct-03-19 Downgrade JMP Securities Mkt Outperform → Mkt Perform
Oct-02-19 Initiated Exane BNP Paribas Outperform
Jul-25-19 Reiterated Oppenheimer Outperform $437 → $356
Jul-22-19 Downgrade ROTH Capital Buy → Neutral $238

Tesla Stock 1 Day Moving Averages

Name Value Action
Exponential Moving Average (5) 462.41 Buy
Simple Moving Average (5) 457.20 Buy
Exponential Moving Average (10) 443.33 Buy
Simple Moving Average (10) 440.56 Buy
Exponential Moving Average (20) 417.16 Buy
Simple Moving Average (20) 410.39 Buy
Exponential Moving Average (30) 398.12 Buy
Simple Moving Average (30) 384.80 Buy
Exponential Moving Average (50) 369.67 Buy
Simple Moving Average (50) 365.15 Buy
Exponential Moving Average (100) 328.07 Buy
Simple Moving Average (100) 302.74 Buy
Exponential Moving Average (200) 300.44 Buy
Simple Moving Average (200) 269.74 Buy
Ichimoku Cloud Base Line (9, 26, 52, 26) 412.87 Neutral
Volume Weighted Moving Average (20) 420.98 Buy
Hull Moving Average (9) 477.05 Buy

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