Tesla’s stock price sunk nine per cent in yesterday’s trading session. This was a continuation of a long-term bearish move that has seen the stock drop by 19 per cent in the past month and 32 per cent year-to-date.
Why is Tesla Stock falling
The current slide in Tesla prices is due to a combination of factors that have happened in the past few months. This includes the recent Twitter buyout by Elon Musk, Tesla CEO, which may have led Tesla’s shareholders to worry about Musk’s association with Twitter, and what it means for the electric company moving forward.
The next factor affecting Tesla stocks is inflation in the US and the announcement by the Federal Reserve of a plan to raise interest rates to combat inflation. The impact of this decision by the Federal reserve means investors have become more conscious about their investment.
The higher interests will also make it harder for people to purchase new Teslas, which will likely lead to low sales. There are also fears of a recession, which is likely to accelerate as things become more expensive due to inflation and the rising interest rates.
The past few months have also seen other car manufacturing companies get into the electric cars market. General Motors, for instance, has indicated a willingness to invest heavily in the electric car market. The company is set to begin selling its GMC Hummer electric pickup, and plans are already underway to continue investing in the industry. Other companies, such as Volkswagen, have also started investing in the electric car industry and likely started to worry Tesla’s investors about what the future holds.
Tesla Price Prediction
The chart below shows Tesla has been in a strong bearish move for weeks. It also shows the huge drop in yesterday’s trading session that resulted in a nine per cent drop. The Williams Alligator indicator also confirms the strong bearish move.
However, the current price drop has more to do with fundamental factors. Therefore, my Tesla stock price prediction expects the prices to continue dropping. This is because the current economic factors that have led to the drop will likely last for the next few weeks.
Therefore, investors’ fears, competition in the electric vehicle industry, and consumers’ inability to buy new Teslas will continue for the next few weeks. As a result, there is a very high likelihood that the prices will drop below the $700 support level. This will be the first time the prices are trading below that level since August 2021.