myusername
Banned
HomeToday's drop in TSLA was primarily the result of sector rebalancing. It's the reason why the DOW was up and the NASDAQ was down today. It's hard to believe that TSLA goes down because the price of oil goes up, but that's the crazy way the market works sometimes.
WWW.shortalnalytics.com says that 60% of TSLA transactions were conducted by shorts today, so even if the morning's drop was due to the rebalancing, I suspect the shorts gave a push in the afternoon. Neither the NASDAQ nor other tech stocks I saw had the late afternoon significant drop that TSLA had today.
The good news about sector rebalancing is that it usually is a temporary dip for TSLA. We had two of them last month and still managed to break 198 last week. The reason why it tends to be a temporary dip is because the market is not retreating and because the company's ability to make money has not been materially impacted by the oil rise which set off the sector rebalancing. In fact, I could argue with one arm tied behind my back that the rise in oil will benefit Tesla over time. Consumers have just as much money to spend after a sector rebalancing. Tesla remains a rare high-growth company with a potential trillion dollar capitalization ahead of it years from now. As Tesla demonstrates its ability to deliver, buyers will return. Count on it.