With the NASDAQ100 down about 10%, the current bull market’s darling, Tesla, is down about 27%. Even after a 500% increase over the past year, we believe the current correction will provide a great opportunity to participate in this real trend, which we see accelerating in 2021.
The price data with Tesla suggests that a pullback to the $500-$495 region is on the table. This would provide the most ideal entry, and if we do see a drawdown to this level, expect heavy buying. We realize this would be a sizable drawdown; however, a correction to this level would confirm that our current long-term target of $1400 would be on track.
However, it’s worth pointing out that several momentum indicators/oscillators are currently at levels that have indicated significant market bottoms. For this reason, we may look to layer into a position in the $630s if we receive a series of buy signals.
