Stock Trends

Tesla is bottoming

Good morning,

Electric vehicle maker Fisker filed for bankruptcy this week, a fitting illustration of the demise of the EV-takeover story.

But just because we’re not all going to be ferried around in autonomous coal-powered taxis by 2025 doesn’t mean the stocks are all dead money.

Earlier this week, a prominent strategist suggested Tesla should be replaced in the “Magnificent 7” by Broadcom, and while Broadcom is no slouch, Tesla has been working on a bottoming pattern for most of 2024.

That kind of negative sentiment, when the stock is actually improving, is always interesting and a potential breakout we featured last Thursday has been shaky but ultimately held.

It’s not my favorite stock (it probably isn’t in my top 10) but I think Tesla is bottoming here and worth a shot for aggressive investors.

This week, we’ll look at potential targets for Tesla as well as:

• Other electric vehicle makers

• New highs for stocks on our Blue Chip Hot List

• The big swap in XLK

• Bullish divergences in beaten-up big bases

• and more!

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Tesla is bottoming (other other EV makers)

Tesla setting up for a run to the neckline

Tesla broke out last Thursday and successfully retested the breakout on Monday. This bottoming pattern isn’t complete until Tesla clears the neckline range ($196-$207) but a breakout conservatively measures to $250. Tactically, I want to see the stock hold above $177.

Even Lucid with modest signs of life

To be clear, I 100% would not buy this stock. But even Lucid, which is down a hilarious 96% from its highs and I’m sure headed to the same fate as Fisker, has a 50-DMA that has flattened out for the first time in 9 months. If even this is tactically overdone, it should be supportive of Tesla.

GM bounces off support

Electric vehicles only account for 2% of Chevrolet’s total vehicle sales but that’s enough to be the second-largest seller of US electric vehicles behind Tesla. Whether that’s part of the story or not, GM successfully retested the $45 breakout point and looks set to move higher.

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Blue Chip Hot List updates

New highs for Booking