Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.
On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.
The pronounced rotation out of high price/earnings issues into value issues continues in Monday’s session. One of the issues leading the charge lower in the growth stocks is Tesla Inc TSLA.
177% Rally Off November Low To All-Time High: In March 2020, Tesla bottomed at $70.10 on a split-adjusted basis. One would think that when it ended October at $388.04 that it may be due for a breather.
After already having a great month, the much-anticipated announcement that the company was going to be added to the S&P 500 index was made after the close on Nov. 30. The following session it had a modest increase, rallying from $567.60 to $584.76.
This Is The Top, For Sure: The predatory buying ahead of the issue being added to the index on Dec. 21 was relentless. In a volatile fashion, the issue worked its way up to $655.90 before the last day of trading ahead of the issue being added to the index.
On that last trading day, it bottomed at $628.54 in the final 30 minutes of the session but gapped up to close at a new all-time high of $695.
Those who shorted that print were instantly rewarded the next session when it declined to $649.86. Many investors were looking for more, especially after the issue tumbled to $614.23 two days after the addition, but that certainly did not turn out to be the case.
Major Winning Streak: Off that low, it was higher in the next 11 sessions, rallying all the way to $884.84 on Jan. 8 and ended the day just off that high at $880.02. The following day it tumbled to $811.09 but wasn't done yet. It made its all-time high on Jan. 25 ($900.40) and posted its all-time closing high the following day at $883.09.
Moving Forward: An old adage in the markets is “what a bull eats in a year, a bear scarves in a day.” With respect to Telsa, the damage hasn't been that severe. However, it has shed 37% percent of its value since making its all-time high.
The good news for bulls is that the issue matched its December low ($541.21) on Friday when it bottomed at $539.49 and rebounded back to $620.13 earlier in Monday’s session. The bad news is it has surrendered all of the early gains and is now in the red by $25 at $572 as of 2:30 p.m. ET.
The really bad news is that the next monthly low is not until the low from where the monster rally started from back in November at $392.20.
Disclosure: The author of this article is long shares of Tesla.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
