Tesla : what is next !!

Hello Traders,

In my last analysis, I mentioned that Tesla has formed a Head & shoulders pattern targeting 100 level

in this analysis, I will try to provide a more comprehensive analysis based on fundamental & technical analysis.

first of All, why tesla is declining in such a way, around 70 % from November 2021 top. In my opinion below are some of the most important reasons:

1. interest rate: as you might know, the rising interest rate has a negative impact on the stock market overall, and growth stocks especially. This is due to the fact that high-interest rates make risk-free investments more attractive than financial market investments such as stocks.
2. Supply chain challenges
3. chain issues such as covid-19 restrictions
4. overvalued multiples for tesla
5. Elon Musk and Twitter acquisition

let's discuss the fundamental aspects of the stock:

currently trade at :

P/E 33 Vs. 10 for peers
P/B 9.9 Vs. 1.92 for peers
P/S 5.2 Vs 0.8 for peers
EV/EBITDA 23.9 Vs 9 for peers
EV/EBIT 30.8 VS 12.3

As you note , it is very overvalued in comparison to its peers. And if you do the math by yourself, it should be at 50 level

in terms of technical analysis, Tesla formed H & S reversal pattern, with a fake breakout of the uptrend channel.

As per this price channel, the next support is at the 40 - 50 level which matches with fundamental analysis based on multiples

So, In my humble opinion, I think the fair value of the stock may be at 40-50 level.. This doesn't mean it may not has some counter-trend reversal, but I think the best long opportunity could be on 40 - 50 level

wish you all the best in your trading ..