Direxion Daily TSLA Bull 2X Shares (TSLL) experienced a significant 5.01% surge in the last 24 hours, despite concerns surrounding Tesla's inventory and demand issues. This leveraged ETF, which aims to provide twice the daily performance of Tesla's stock, saw an unexpected uptick amid mixed news for the electric vehicle giant.
The rally in TSLL comes as a surprise, given that Tesla's stock fell 4.9% in regular trading on Tuesday. Several factors contributed to Tesla's stock decline, including a lowered price target from longtime bull Dan Ives at Wedbush, who reduced his target from $550 to $315 while maintaining a Buy rating. Ives cited concerns about CEO Elon Musk creating a crisis with the Tesla brand.
Adding to Tesla's challenges, reports emerged that the company already has new Model Y inventory available in the US, just days after opening orders for the non-Launch Edition version. This unexpected availability has raised questions about demand for Tesla's most popular model. Some analysts interpret this as a sign that Tesla's backlog of demand for the new vehicle lasted only four days, potentially indicating broader issues with consumer interest.
Despite these headwinds for Tesla, TSLL's leveraged nature may have amplified a potential after-hours recovery or anticipation of a bounce-back in Tesla's stock. It's worth noting that leveraged ETFs can sometimes behave unpredictably, especially in volatile market conditions.
Investors should remain cautious, as the discrepancy between TSLL's performance and Tesla's stock movement highlights the complex dynamics at play in the electric vehicle market and the potential risks associated with leveraged investment products.
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