Why is Cathy Wood selling $Tesla Motors(TSLA)$ ?
If she's a fundamental trader, I am sure she would have known that Tesla is having a BIG price war in CHINA to "kill off" competiton.
https://www.teslarati.com/tesla-price-war-destroys-china-rivals/
All along everyone thought Tesla has a first mover advantage and they are going to CONQUER the whole EV market. I guess that WAS TRUE before but not so true now. (Although they are still conquering the stock market, despite being just another "car maker")
Anyway, they have already been taken over by BYD in China and MORE and MORE new and traditional car makers are entering the EV market with their own models. The REAL competition starts now and a price war is inevitable.
Regardless of how many cars Tesla is going to sell from now, their profit margin will be as thin as sashimi. And whether they can really "kill off" the "Chinese" in Chinese terrority is another question mark. With so much geopolitical tension now, I won't be surprised to see a "You aim my Tik Tok, I aim your Tesla" kind of tic-for-tac actions. *I wouldn't doubt the Chinese for what they did to Alibaba.
So if you are a fundamental trader, it is probably wise to cut some exposure while the stock has recovered from such a low point.
If Cathy Wood is a technical trader, she probably noticed a RSI divergence similar to the peak in Sep 2022 where the buying strength is actually lower than the stock price which could mean the price may not hold. Tesla may be an EV, but it is a "Ferrari" in the stock market, which means it could rise as fast as it can drop. I am sure Aunty Wood is well aware of the pain of bag holding a "Ferrari".
If you are bullish with Tesla, it's either you hold onto this hot potato all the way and trust Elon to outsmart everyone else, or you can consider cutting your loss if price drops below $164 which is a technical support. You can always buy it back later. Good luck guys! TGIF!
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