Tesla Motors Inc (TSLA): Analysts Think Downward Momentum Will Continue

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December 10, 2014 11:02am NASDAQ:QCLN NYSE:GEX

tesla motorsThis was another rough week for Tesla Motors Inc (NASDAQ:TSLA), which has been in a slump for the last three weeks. TSLA fell 7.46 percent for the five trading days from Tuesday, Dec. 2, through Monday, Dec. 8, while the Dow rose 0.44 percent

and NASDAQ rose 0.28 percent.

The biggest drops were on Friday, when TSLA fell 2 percent, and on Monday, when it fell 4.18 percent. TSLA continued to fall on Tuesday. It’s now far below its all-time high of 291.42. For perspective, though, TSLA is still up over 1000 percent from its 2010 IPO price.

Low Gas Prices

Gasoline prices have been falling for 69 days. One popular theory for TSLA’s stock slide is that as the price of gasoline goes down, electric cars become less attractive to consumers, and the demand for the cars will fall. On the other hand, saving money on gas might not be a huge concern for Tesla’s wealthy potential owners.

Blog Says That Tesla Sales Fell in November

Another factor that may have fed into the drop was the report on the Inside EVs blog that estimated Tesla’s sales were down in November (Tesla does not give out its monthly sales figures). However, the blogger expects Tesla sales to soar in December because “an unprecedented amount of US Model S production is now underway.”

Analysts Think Downward Momentum Will Continue, at Least for a While

On Monday, Bespoke Investment Group said that it looked like the $200 level “has a magnet attached to it.” They suggested new TSLA investors make a small initial investment at $200 and then add to their position over the next few months. They think that TSLA is still a great long-term investment, but that downward swings like the current one are inevitable given TSLA’s huge overall rise.

On Tuesday, Orips Research said it thought the downtrend would take TSLA all the way down to $165. Their opinion was based on technical indicators, including Monday’s break below 219.20.

First Model S Delivered in Australia

In better news, Tesla delivered its first Model S car in Australia, which is expected to be a good market for the company. An event celebrating Tesla’s arrival was held in a Sydney casino. The company announced that it expects by next year, it will have a supercharging network in place that will connect Sydney, Canberra, and Melbourne. By 2016, the network should connect all the major cities along Australia’s east coast.

Tesla Tops Consumer Reports Survey

In other good news, Tesla’s Model S was the highest-ranked car, for the second year in a row, in Consumer Reports annual owner-satisfaction survey. The survey asks if people would buy their cars again, and 98 percent of the Model S owners surveyed said yes.

First Trust NASDAQ Clean Edge Green Energy Index Fund — QCLN

If you believe that Tesla has a bright future, but want to avoid some of the volatility that comes with investing in a single momentum stock, consider the ETF QCLN, which invests in 48 stocks, with 8.05 percent of its holdings currently in TSLA.

By Michelle Cook, ETF Daily News

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