TSLA is coming to INDIA !

April 23, 2024 3 min read

As Tesla gears up to enter the Indian market, one might expect its stock to surge in anticipation of tapping into a vast automobile market. However, the reality is quite surprising. Despite the buzz surrounding its India expansion, Tesla’s stock has been on a downward trajectory, exhibiting significant volatility over the past year. This raises questions about how global investors perceive the company’s prospects amidst such crucial announcements.

The journey of Tesla’s stock price reflects a rollercoaster ride for investors. From reaching highs of over $400 in 2021 to plummeting to nearly $100, then witnessing fluctuations back up to $300 and now resting at $147, the volatility is undeniable. Despite major announcements like entering the Indian market, the stock seems unaffected, leaving investors puzzled about its behavior.

Analyzing Tesla’s stock chart reveals crucial insights. It has breached key technical levels, such as the 200-day moving average (DMA), indicating bearish sentiment. For investors eyeing Tesla as a long-term investment, the current downtrend raises concerns about timing. With no signs of an uptick and the stock trading below pivotal levels, caution is warranted.

The BBC Principle: Reading the Signals

The BBC principle, which emphasizes “Bhav Bhagwan Che,” urges investors to heed the signals conveyed by the stock chart. Despite external narratives like market expansion and technological advancements, the stock’s behavior tells a different story. It signals disinterest in immediate growth opportunities, preferring a downward trajectory.

Many who bought into Tesla during previous downturns have seen little to no returns over the years. While the company’s narrative may be compelling, the disconnect between narrative and stock performance warrants scrutiny.

Understanding why the stock price diverges from external narratives is crucial. While Tesla’s success as a company is undeniable, its stock performance may not always mirror this success. Factors like market hype, speculative trading, and broader economic trends can influence stock prices, often deviating from underlying fundamentals.

WeekendInvesting Strategy Spotlight – It isn’t always about the multibaggers !

There has always been a frenzy in the stock market around multibaggers. 

You will often come across stories that go like this – “Oh I bought this stock when it was trading around Rs 25 and today it is trading at Rs 250”. “I made a handsome 10x on this stock”

But, people seldom discuss negative outcomes or stories of their failure. Aspects like risk mitigation, position sizing & opportunity cost often take a back seat paving way for cooler discussions around multibagger stocks. 

Consider the case of “VEDL”. After making a high of Rs 484, the stock has virtually remained flat for 14 long years. One may wonder whether it is even possible to successfully navigate through the troubled waters of a choppy stock like this one but that is where the beauty of momentum lies. 

VEDL entered Mi NNF 10 back in Apr 2021 at a time when most might wonder “Why now”. The stock may not have gone on to become a multibagger for the portfolio but just the fact that a rule based approach could successfully maneuver through a stock like this without having to face a loss & instead to come out with a reasonable gain of 50% speaks volumes about the ability of momentum investing to keep you calm and composed at all times without having to worry about the outcomes too much. 

So multibagger is not the only thing that sounds cool, 

Identifying and extracting momentum in a stock that has remained stagnant for 14 years is also a story worthy of a discussion. 

Disclaimers and disclosures : https://tinyurl.com/2763eyaz

If you have any questions, please write to support@weekendinvesting.com

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    TSLA is coming to INDIA !