Tesla Stock Down 50% This Year; Is it Time for Investors to Consider It Again?

Elon Musk Drama Presents Opportunity to Once Again Look at TSLA Stock

Elon Musk has been extremely busy lately after his soap-opera acquisition of Twitter, Inc. The drama at Twitter has been unfolding right before our eyes as Musk cleans house and tells the remaining employees to work longer hours or resign.

So while the chaos at Twitter will likely continue to make headlines, Musk does have other companies to run. His pride and joy, Tesla Inc (NASDAQ:TSLA), is still the dominant pure-play electric vehicle (EV) company, but Tesla stock has fallen in 2022.

Perhaps because Musk is distracted by his activities at Twitter (he’s now the sole director), the market is concerned about TSLA stock.

Tesla stock is down by 50% this year, establishing a new 52-week low of $176.55 on November 18. Given that TSLA stock was trading at $402.67 in January, its 56% price decline looks compelling at first glance.

Tesla Inc will continue to face challenges in achieving its high production expectations, especially with a slowing economy in which EV stocks are under pressure. There’s also an increasing threat from other pure-play EV companies and legacy automakers.

Supercharged Long-Term Price Appreciation for Tesla Stock

Pushing Tesla Inc’s fundamental picture aside, let’s look at TSLA stock from a technical perspective.

The below Tesla stock chart, starting from 2011, shows the stock breaking out of accumulation channels in 2013 and 2017 and massively surging in 2020.

But following those significant upward moves, TSLA stock finds itself in another sideways channel, facing downward pressure and a test of support.

Chart courtesy of StockCharts.com

Shares of Tesla Inc at Major Support Level

Tesla stock’s three-year chart below shows shares of Tesla Inc currently at the low end of their multiyear sideways channel, straddling key support around $176.00 to $178.00.

The previous time TSLA stock traded at this channel support level was in early to mid-2021. That was followed by a major rally of more than 125% to its January 2022 high.

Chart courtesy of StockCharts.com

What I want to see Tesla stock do is hold at its support level. If this happens, look for shares of Tesla Inc to take a run at their 50-day moving average of $236.43 and 200-day moving average of $269.58, representing a potential move of 52%.

TSLA stock is supported by an oversold relative strength index.

Tesla stock’s money flow index (MFI) at the bottom of the above chart shows muted activity. MFI is an indicator that uses a stock’s price and trading volume to identify overbought or oversold conditions. Watch for Tesla Inc’s MFI to move toward 20, which would be an oversold signal that represents a potential bounce.

On the downside, if TSLA stock fails to hold at its channel support level, it could move down toward $150.00 and become a good opportunity.

Analyst Take

Elon Musk is clearly busy at Twitter, and Tesla Inc’s share price appears to have suffered because of it.

My view is that Tesla stock continues to be compelling and that investors should consider it due to its current price weakness.