Tesla cracks but broader tech holds on.Which side wins? | Forexlive
For the past few years, there’s been a strong correlation between shares of Tesla and the Nasdaq but it could be breaking. Today, shares of Tesla are down more than 9% but the Nasdaq 100 has staged an intraday rally and is trading nearly unchanged. That’s all-the-more impressive given that Tesla has a 3.8pp weighting in the index.
What worries me is that TSLA shares have broken the March low, albeit only fractionally.
I’ll be watching the closing level today and tomorrow’s weekly close but you can see that Tesla doesn’t have much support. The rally to $217 from the December low of $101.81 also fell between the 50-61.8% retracement zone of the drop from the all-time high of $414.50.
That’s two technical reasons to be bearish and yesterday’s report showed margin compression. There’s also the marketing problem of Elon Musk’s increasingly off-brand behaviour and his time split among three companies.
But the bigger question is whether the Nasaq will follow Tesla lower. So far there isn’t any sign of the same kind of weakness. The Nasdaq Comp has quickly recovered from the SVB rout and the market is enthusiastic about generative AI.
I don’t think there’s clear signal with the charts pointing in opposite directions. I think there’s the potential for divergence but at best it would be the Nasdaq holding steady while Tesla sinks.