Should I buy TSLA, RIVN or LCID?

  • TSLA drops nearly 5% on Friday due to supporting macro factors.
  • All EV LCID stocks, Chinese names suffer the same fate.
  • Tesla is again aiming for its 200-day moving average.

Tesla (TSLA) trailed many electric vehicle names (all, if we’re right) lower on Friday as macro factors took over stock markets. The dominant theme so far in 2022 has been rising rates and inflationary pressures. This led to strong growth and underperforming technology stocks, while energy and financial stocks were the place to be. This should remain the theme at least for the next quarter, if not also for the second quarter.

Tensions between Russia and Ukraine have pushed the price of oil above $90 and financial stocks are benefiting from higher interest rates. Growth stocks, however, do not benefit from higher interest rates as investors seek companies with cash. With higher interest rates, future cash flows become less valuable. Thus of the three names mentioned, Tesla, Rivian (RIVN) or Lucid (LCID), we would not want to be any of them for a long time. We expect TSLA to be the best performer of the three due to its leading market position and revenue, but this sector is no longer in vogue and will likely remain so.

Tesla Stock News

The latest data from the China Passenger Car Association (CPCA) confirms what we saw earlier from Chinese electric vehicle companies. January deliveries are down from December. This is due to the Lunar New Year in China. Tesla sold 59,845 vehicles in January, compared to 70,847 Chinese-made vehicles in December. China’s EV market remains the largest EV market in the world, aided by government incentives and people’s demand.

Tesla Stock Forecast

Tesla remains in the strong downward trend identified earlier this year. $945 has been tested several times as resistance and failed. This led to the recent setback. Now $824 remains as the 200-day moving average. Below we have trendline support at $752. The 200 days is the key level. Tesla hasn’t closed below its 200-day moving average since June 2021. It’s topped 200 days on an intraday basis several times since, but still hasn’t closed below it. Notice how volume has steadily declined at Tesla this month, despite a few extremely volatile days. This is indicative of a lack of conviction in the title.

Tesla Chart (TSLA), Daily

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Karen J. Nelson