This pro is waiting for Tesla stock to hit $450 before buying

Tesla Inc. (NASDAQ: TSLA) has been one of the worst performers this year having tumbled 20% year-to-date.

Growth stocks across the board have been performing poorly in the last few weeks with Tesla leading the pack and down by about 19% over the past one-month period as well. Nasdaq Composite Index is down 2% over the same period.

Are you looking for fast-news, hot-tips and market analysis?

Sign-up for the Invezz newsletter, today.

Adding to the woes for the tech firm will also be the fact that the price of Bitcoin has fallen below the levels at which it was trading when the company first disclosed its Bitcoin holdings, potentially leading to losses on the firm’s Bitcoin purchases.

Read our step-by-step guide on how to buy Tesla shares.

What are the analysts saying?

In an interview on CNBC, JC O’Hara, chief market technician at MKM Partners said: 

“It broke below trend, and we have to remember, when we analyze stocks such as Tesla, they are prone to overreact — overreact on the upside, as well as overreact on the downside,” said 

He further said that Tesla was in an uptrend in January and trading above its 200-day moving average and was overreacting on the upside. Now the long-term trend has shifted as the stock has broken below the 200-day moving average. He believe the overreaction will to the downside now while also adding: 

“We’re right around $550 right now, good place for a short little bounce, but I would want to see the overreaction down to $450. I think that’s the proper level to get back involved with Tesla.”

Another analyst, Delano Saporu, founder of New Street Advisors, said in the same interview: 

“The backdrop is really against Tesla right now, for a lot of growth names, so we’re seeing the sellers come out in force. And I think the one thing that would kind of bring buyers out, especially myself, would be looking at the valuation.”

Further expanding on his analysis, he said the stock didn’t move higher even though the company reported strong earnings as the current backdrop is against the growth names right now.

Shares of Tesla are still up a staggering 256% for the trailing one-year period and they last traded at levels around $450 in November. A drop to $450 will represent another 20% from the current levels. Shares are currently trading at around $581.