What is going on moongate so today i have an interesting question for you: do you believe that tesla stock is about to fall off of a cliff and plummet all the way to 90, because well one analyst believes so in this video i will be going over His reasoning, and then after that i will be talking about if you should buy or sell tesla before it is included in the s p, 500 and at the end i will be doing a technical breakdown of tesla stock. So we know what price levels to watch over the next few trading days, but before we get into all that as a quick reminder, if you enjoyed this video, it would be great if you could drop a like and if you haven't already don't forget to join The moon gang by hitting the subscribe button, all of your support, is truly appreciated and now, let's get started, it was just reported that tesla received an extremely low price target of 90 from jpmorgan jpmorgan. Analyst ryan brinkman has told his clients not to increase their holdings in tesla to approximate its weight in the s p 500, ahead of its inclusion to the benchmark on december 21st. The assessment reflects some of the concern on wall street for the pace of tesla's meteoric rise this year, which has added more than half a trillion dollars to the company's market value, while its net income for the third quarter of this year was only 337 million.

Brinkman says tesla shares are, in our view and by virtually every conventional metric, not only overvalued but dramatically so citing a stock price that trades 1 325 times its long-term price to earnings. Multiple brickman advised clients not to increase their holdings in tesla to approximate its 1.44 weight in the s p 500 benchmark now, mr brinkman might be right. Tesla might be overvalued, but that doesn't change the fact that people who've been betting against tesla stock have lost big. In fact, the bear camp has lost more than 25 billion dollars, betting against the company.

I would also like to point out that he used the word conventional metric. Clearly tesla cannot be thought of as a typical automaker and i think that's part of the reason why wall street analysts have been getting their calls on the stock so wrong for so long. Please keep in mind that tesla will be added to the s p 500 on monday december 21st. Personally, i'm expecting some extreme volatility on both friday, the 18th and then on monday, because this move could trigger a collective 73 million in new purchases from investment funds.

When there's this big of money at play, you can definitely expect some large swings before we jump into the chart. Let's talk about a different analyst opinion on what will happen with tesla when it's included in the s p 500. This article was posted on barons. If you want to check it out yourself, tesla lost a bull, long-time tesla bull and new street research.

Analyst pierre or something downgraded tesla stock from buy to hold. He thinks it's a good time to take some profits ahead of tesla's inclusion into the s p. 500. However, he still believes in the long-term outlook and recommends investors buy tesla stock on any weakness.

The downgrade appears to be about valuation similar to the analyst from jpmorgan. However, pierre is not being such a negative nancy. His price target is still 578, even though he sees shares hitting 1200 in 2025. He expects tesla to be in the middle of a decade of what he calls hyper growth at this price level in 2025, you would earn 20 a year on average.

So basically, pierre believes that the recent run-up was a little bit too much, but overall he is still bullish on the company and very quickly. I thought this last part was something that would be useful for you to know, shares are being bid up ahead of the stock's addition to the s p 500, which will require index funds that track the index to buy tesla stock on or around december 21st after Index funds purchase tesla stock. It's possible shares could drop. That has happened in the past when other large stocks have been added to the s p.

500. Now i don't have a crystal ball, so i can't tell you what the future holds, but i thought it would be useful for you to know that there is some sort of precedent for very popular stocks to drop after they've been added into the s. P. 500.

Just something to consider now, let's see what's going on in the charts when the market closed for the day, things were much better for tesla. Compared to yesterday, tesla stock managed to gain 3.7 percent, which puts it at 627. Things are even better when you realize that today it gapped down and over the day it actually gained 9. Today's action was a little heavy.

The total volume of shares traded was about 13 million extra compared to its own 10 day average, and i think this is just people jocking for position before tesla is included in the s p 500, its performance over all the major time frames is green and from The start of the year until right now tesla is up an incredible 645 percent, absolutely amazing. Anyway. Here's the current technical situation that tesla is in it made a recent relative high just above 500, and this came right after the company went through a five for one stock split. But when that stock split actually went through, there was a sell-off all the way down to 331..

From there the stock ping pong back and forth in this triangle, then there was a bullish, breakout and a double top rejection at 460.. This led to a sell-off as the market went into november, then, after a little bullish push followed by a little bearish push, it was announced that tesla would be included in the s p 500, which led to this gap up and at first it looked like there Would be a triple rejection at 460, but clearly, instead, there was a bullish explosion from the time that it was announced. The stock is now up an incredible 54 percent. Most recently, tesla managed to hit a new all-time high, just above 654 dollars.

Unfortunately, the day it hit, it was actually a bearish engulfing candle. Fortunately, for all investors today the bow cam came back swinging to get back to that all-time. High tesla would need to gain 4.5 percent. Now, if and most likely, when tesla makes a brand new all-time high, we would need to wait for the chart to develop in this region and to let price discovery play itself out.

So we can call out new points of technical resistance. Putting that aside for now, though, if the stock runs into too much supply and it gets rejected, the first price level i would watch would be the region of resistance from late november, just above 600 and past that we have this region of support at 541. From early december, from the most recent close to get to those two levels of support, the first one would be a drop of three percent and the second one would be a drop of thirteen point. Six percent personally, i'm pretty interested in the second support, especially because it aligns with this trend line, but in all honesty i would be very excited to buy more shares of tesla at this third support and the last relative high of 502.

Now, if you're not yet invested in tesla, there's a few things that you should be aware about before hopping on this rocket ship. First of all, we are very close to the all-time high. Second, we have the s. P 500 inclusion coming up in a few days which will most likely prompt some serious volatility and third there's bearish divergence in the rsi.

If you take a look at the last relative high of 605 and then compare that to the new high at 654 you'll notice that the rsi didn't change much, this is a sign that the buyers are getting tired and i know it can be extremely difficult to Time the market, but the current technical setup leads me to believe that at some point in the future, you will be able to invest in tesla for cheaper than 627 dollars to get a better idea of what might happen over the next few days, though, let's check Out the four hour chart before we jump into this time frame, i wanted to quickly mention that the name of this charting software is trainingview and for those of you who are interested, there's a link to a free 30-day trial in the description of this video. If you sign up it's a great way to support this channel anyway, back to tesla from mid-november until december, the stock was caught in this bear flag and then it eventually broke down and on three separate occasions. It tried to get back into this upward channel, but it failed, and recently there was an official rejection on this time frame. We can better see that bearish divergence i was talking about even though tesla made a new relative high, the rsi didn't after the rsi had an opportunity to cool off the bulls, came back with some serious strength and pushed the stock from 576 and right now.

It's up at 6. 35. Honestly, i wouldn't be surprised in the slightest if the stock is testing its all-time high within a few days. Personally, though, i won't be making any new plays on tesla stock between now and december 21st, because i have no clue how this inclusion into the s p, 500 will play out.

As for my old plays, though i am currently invested in tesla and my cost basis is exactly 400, which means i'm up a pretty respectable 50-plus percent in more of a general sense. I would be interested in picking up more shares around 541 and i would definitely pick up more shares around 500.. Now, if you happen to be more of a swing trader, i would recommend paying close attention to these levels of support and resistance and watching for divergence to be formed in the rsi. But if you happen to be more of an investor, you should know that timing.

The market is no easy feat and you should be confident that tesla stock will be much higher years down the road than it is right now, with that being said, as things continue to develop with tesla i'll make sure to keep you updated in future, videos so Make sure you have your notifications turned on? I would love to know your thoughts on tesla in a comment below. Do you agree with me that 90 seems to be an incredibly low price target for the stock, and how do you believe that the stock will react when it's finally included in the s p, 500, and if you have any questions, feel free to post those as Well, because i'd be more than happy to answer them in future videos. If you enjoyed this video, it would be great if you could drop a like and if you haven't already don't forget, to join the moon gang by hitting the subscribe button. All of your support is truly appreciated and, as a quick reminder, if you're new to trading or if you're, just looking for a new trading, account, there's a link to the weeble trading platform.

In the description of this video, the company is currently running a promotional deal where, if you sign up and make a deposit of 100, you will be awarded four free stocks. So it's definitely worthwhile to check out thanks for watching and until next time. Best of luck in the markets, you.