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Tesla’s share price could fall another 5-10% if a negative “herd mentality” triggers “massive sales”

Elon Musk
  • Tesla has lost 10% in the last week due to a number of events, but a strategist predicts additional pain for the shares.
  • Ticker Tocker’s Steve Kalaydjian told Business Insider: “More bad news for Tesla and there will be a herd mentality [towards] mass sales. “
  • But he says he would “swallow” Tesla shares if they fell to $ 200.
  • Visit the Business Insider homepage for more stories.

Tesla had a tumultuous week, including a market sell-off and a surprise shutdown from the S&P 500, which resulted in a 1

0% drop in shares in just one week, but the shares of the electric vehicle maker could come under fire again.

The world’s most valuable carmaker could face another 5-10% correction, according to Steve Kalaydjian, chief market strategist at the Ticker Tocker online trading platform.

“I think there will be some basic support for Tesla, probably around the levels of $ 255 to $ 285,” Kalayjian told Business Insider. “More bad news for Tesla and there will be a herd mentality [towards] mass sales. “

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Last week, Tesla was excluded from the S&P 500 index, although the carmaker noted many eligibility requirements and was expected to make the cut.

Shares in the company, which rose nearly 350%, fell a record 21% in one day on Tuesday after failing to qualify for entry.

Kalaydjian said Tesla is likely to be included in the S&P 500 by next year.

“I don’t think they will replace Exxon. But if something is included in 2021, or at least there will be talks about it,” he added. Oil and gas maker ExxonMobil was kicked out of the Dow Jones Industrial Average last month after nearly a century of membership and replaced by cloud software company Salesforce.

Tesla’s share price then recovered over the next two trading days to close 1% higher than $ 371.34 on Thursday, after reports that the company was making progress in its locations at Gigafactory in Texas and Germany.

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On August 31, Tesla also introduced a planned 5-for-1 share split.

“I would like to win here,” Kalayjian said. “Especially after the stock split.”

He said the fact that the shares had risen even on the day of the split showed the irrationality behind buying the shares.

Tesla could fall to $ 200-250 when it then tries to “swallow stocks” in that price range, Kalayjian said.

Even if his most pessimistic forecasts were correct and the shares fell to these levels, this would still return the shares to where they were in early July.

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