This year, shares of electric car manufacturer, Tesla, increased by 376% before closing on Friday. However, this phenomenal growth cannot last forever. Yesterday, Tesla's shares fell by -1.75%. Some analysts see this as a pattern.
A trader and an analyst, Sven Henrich, posted a few warning tweets about Tesla stock chart having a chance to repeat the 1999-2000 chart of the Cisco stock.
It'll never go down again. Bears are stupid. It's different this time. Time to raise price targets. Sven Henrich @NorthmanTrader via Twitter
Then Sven published a tweet with a price chart of Cisco's shares. It shows how the price rushed sharply down after the exponential rise in price.
Oh wait, that was $CSCO in 1999/2000. Sven Henrich @NorthmanTrader via Twitter
The trend of overbought TSLA shares. There is a negative divergence in MACD and RSI markers (14), which indicates pulse fatigue. Shares work as an asset, not as a corporation. When shares are split, there is an incentive to "buy the rumour and sell the fact". The price correction can be at least 50% with a conservative approach.
Another way to calculate the ludicrous interest of Tesla is by means of net profits. Let us assume, hypothetically, that 100% of the annual income was charged as a payout to shareholders. It's not likely, of course, but there is a chance.
Let us recall that yesterday, before the opening of trading, the Tesla's price per share surpassed the mark of $2,100 on the news about the pre-order of a new Model Y in China, after which the price fell sharply by more than 2% and stabilized above the price point of $2,000.