Tesla Stock Could Sink to Less than $200

It’s time to short Tesla (TSLA).

Sure, the electric vehicle boom is still red-hot.  Demand for EVs is accelerating. However, after running from $150 to $275 it was overdue for a healthy pullback. Even RSI, MACD, and Williams’ %R were overextended. That being said, we wouldn’t be shocked to see TSLA drop below $200 a share in the near term. Even Goldman Sachs sees further downside.

In fact, analyst Mark Delaney downgraded the EV stock to neutral from buy, marking the third downgrade in a week.  Barclays and Morgan Stanley also believe TSLA’s rally is overdone.

According to Delaney, “While the primary reason for the change in our view is that we think the market is now giving the stock more credit for its longer-term opportunities, we are also cognizant of the difficult pricing environment for new vehicles that we think will continue to weigh on Tesla’s automotive non-GAAP gross margin this year.”

Once the pullback is over, we do believe TSLA could see higher highs on demand.

TSLA last traded at $241.85 – down $14.75 on the day.