Tesla (TSLA) is in a Bubble

Tesla's weekly RSI chart is very overbought and it is trading at a record premium to its 200 week moving average. Of course, it could move a little bit higher over the very-near-term, but it has become ripe from a very serious decline.

When a stock moves into bubble territory, it does not necessarily mean it will never recover from a substantial decline. Not all bubbles end up like tulips did a few hundred of years ago. Just look at Amazon in 2000. It was in a bubble and crashed over 90%...even though it eventually traded much higher (and became a globally dominate company).

I'm not looking or a 90% decline in Tesla. I'm just saying that when a stock get's as overbought and extended as Tesla is right now, it can see a serious decline...no matter where it is going over the long-term.

Posted to The Maley Report on Aug 26, 2020 — 8:08 PM
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