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The Case For Boring Markets (And What’s Up With Tesla?)

By Jani ZiedinsStock MarketsApr 08, 2021 12:12AM ET
www.investing.com/analysis/the-case-for-boring-markets-and-whats-up-with-tesla-200571845
The Case For Boring Markets (And What’s Up With Tesla?)
By Jani Ziedins   |  Apr 08, 2021 12:12AM ET
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Tesla Inc Daily Chart
Tesla Inc Daily Chart

Wednesday was another quiet session for the S&P 500 following last week’s 4k breakout.

While most traders are addicted to drama, boring is vastly underrated. Emotional markets produce big moves, unfortunately, most of the time the big action occurs in the wrong direction. On the other hand, boring markets make far smaller moves, but most of them line up in the positive direction. And lucky for bulls, we are in the middle of a very boring market.

Headlines remain benign and stocks continue rallying on “less bad than feared.” Until something changes, stick with what has been working. Hold for higher prices and keep lifting our trailing stops.

The index finished with a small gain but someone forgot to tell Tesla (NASDAQ:TSLA). The electric car maker lost 3% yesterday, in an otherwise decent day for leading growth stocks.

While we don’t want to overreact to a single day of underperformance, we need to see TSLA lead this market higher, not lag behind it.

Last week’s nice bounce off of $600 support was buyable, but if this underperformance continues, we need to pull the plug and lock-in profits while we still have them. (And if this retreats under $600, that becomes an attractive short entry.)

I’m not giving up on this stock just yet, but I have it on a short leash.

The Case For Boring Markets (And What’s Up With Tesla?)
 

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The Case For Boring Markets (And What’s Up With Tesla?)

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Comments (2)
Ron Love
Ron Love Apr 08, 2021 9:31AM ET
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Jani, you’re a donkey bro. You complain about Tesla’s -3% compared to the rest of tech-growth for your narrative. Why didn’t you compare Tesla to Li, Xpeng, or Nio? How did they fare yesterday? I’ll tell you, substantially worse than Tesla did.
Fabrizio Fusaro
Fabrizio Fusaro Apr 08, 2021 9:31AM ET
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But Tesla is a tech company not a car company...don’t it? No?
Ron Love
Ron Love Apr 08, 2021 9:31AM ET
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Fabrizio Fusaro So are the other EV manufacturers. An EV is a laptop on wheels.
Chris Johnson
Chris Johnson Apr 08, 2021 3:14AM ET
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I think it's a clear sign - more and more investors starts doubting if the extreme valuation is right. Competition is coming strong and fast. Tesla is no longer alone in the EV market and that will make the whole situation much more difficult.
Ron Love
Ron Love Apr 08, 2021 3:14AM ET
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Umm, the competition did far worse yesterday. Lu, Xpeng and Nio were down -7,-8, and -12%.
Ron Love
Ron Love Apr 08, 2021 3:14AM ET
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*Li
Chris Johnson
Chris Johnson Apr 08, 2021 3:14AM ET
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Ron Love  Yes, I know. But I actually don't see these new chinese EV companies as the strongest competition. It will be come from the established manufacturers
 
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