Is Tesla Powering Down?

It’s been a big week for electric vehicles and traditional automakers. Yet, Tesla has drifted aimlessly – a potential sign of momentum fading in Elon Musk’s company.

First, consider the trend line that began in May. After successful bounces along that support in June and November, price has moved below it this month.

Next, the current level is right around the “nice round number” of $700. This is near its 2020 close and the top of a bullish triangle in December. It could be turning into resistance again.

Third, notice how TSLA’s 21-day exponential moving average (EMA) has crossed decisively below its 50-day simple moving average (SMA). This breaks a pattern of intermediate-term bullishness that began in April.

Finally, relative strength is very poor compared with rivals like General Motors. Speaking of rivals, several legacy automakers including Volkswagen and BMW had EV news this week. These companies also trade at much lower multiples. Is money shifting from the new and back to the old?

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