With Tesla making new highs when will we see a correction?
I can tell you over the last 10 years Tesla has lost over 30% of its value 14 times!
Nov 10 - Feb 11 - 42%
May 11 - Aug 11 - 31%
Nov 11 - Jan 12 - 33%
Mar 12 - Jul 12 - 36%
Sep 13 - Nov 13 - 40%
Feb 14 - May 14 - 33%
Sep 14 - Mar 15 - 38%
Jul 15 - Feb 16 - 50%
Apr 16 - Nov 16 - 33%
Jun 17 - Apr 18 - 36%
Aug 18 - Oct 18 - 36%
Dec 18 - Jun 19 - 53%
Feb 20 - Mar 20 - 63%
Aug 20 - Sep 20 - 34%
𝗪𝗵𝘆 𝗮𝗺 𝗜 𝗽𝗼𝘀𝘁𝗶𝗻𝗴 𝘁𝗵𝗶𝘀?
I’m not posting it to scare anyone and I’m certainly not bearish on Tesla, however, I am aware that with large gains come large drawdowns.
From November 12 to Sep 13 price rallied over 600% before a pull back of 40% losing nearly half its value!
From November 13 to Feb 14 price gained over 120% from the low of the previous swing before losing 33% of the share value.
Between Jan 17 and Jun 17 price gained over 100% before pulling back 36%.
From June 19 to Feb 20 we saw over a 400% gain followed by a 63% drop!
During Mar 20 to Jul 20 again we saw another 400% gain before falling over 20% then rallying another 85% followed by another 34% pull back.
Now today we can see another +117% gain from the last correction in September.
What does this mean? Well it’s impossible to predict when we will see another correction and the S&P inclusion news is still driving momentum, however, at any point we need to expect a drawdown and as we can see from historical data it’s not unusual for Tesla to face over 30% drops. If we take the average correction of 39% and apply it to the current price we could be looking at a low of $430 As with anything in the stock market nothing is guaranteed but if you are invested in Tesla then you need to be prepared to ride out large drawdowns and expect the share price to lose over 30% of its value at any time. If you can ride out the volatility I do think Tesla will continue to be one of the greatest companies of our generation. Want to invest in Tesla? You can from as little as $50 through eToro or copy my trades direct!
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