Tesla Stock Update: Meltdown in Tesla Beginning as Forecasted

In my February Tesla update, I described how Tesla was positioned for an accelerated breakdown if prices slipped below the $780 low. At the time, TSLA was trading just above $800 (see chart below). It appears the breakdown is underway, and this could turn into an outright collapse into mid-March.

CURRENT CHART (TSLA): Anybody that bought Tesla after they entered the S&P 500 on December 21, 2020 is losing money below $650. A lot of new investors have only seen values go higher – never lower. If prices drop below $600, I think some of these investors may begin to panic out of their positions. The $600 level may be tested soon, let’s see what happens.

Note- Prices could collapse to the price gap near $420 or lower if we enter a waterfall type decline.

MARKET UPDATE (SPY): Prices are very close to testing last week 378 low. The market remains vulnerable to a potential breakdown into mid-March, similar to 12-months ago.

Potential Breakdown Triggers: Senate negotiations over the $1.9 trillion stimulus turn negative or spiking interest rates are the obvious choices.

Note- I’m afraid a breakdown in the stock market could trigger more downside in gold miners, so I’d like to wait a little longer to see if stocks break down before adding to our educational portfolio. Senior gold miners are very cheap, in my opinion.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

For a look at all of today’s economic events, check out our economic calendar.