Tesla Bounce is Least Bulls Can Do

A relief rally is well underway this week and a bounce in Tesla (TSLA) after earnings seems like the least bulls should be able to do. 

The once high-octane leader of bull markets past has been the laggard of the megacap trade for over a year now, with few charts as relentlessly under pressure as Elon Musk's automaker. It's been a brutal combination of fundamental weakness in electric vehicle sales with an unwind in the stock's valuation as investors piled into tech giants more closely tied to the latest breakthroughs in language-model artificial intelligence. Still, the report was mostly full of known risks. 

Yes it's an auto company at heart, but if there's any love for the AI trade remaining, the company that's breaking down the autopilot barrier in vehicles should be still have the ability to spark investors' imaginations. The margins have indeed gotten pinched over the past year, but they didn't come in worse than expectations. If there's any appetite for dip-buying whatsoever, Tesla shares seem like as good a target as any. 

None of this is to say the long-term trajectory of the stock should change, but after a solid couple days for the market, a bounce in the penultimate cult favorite growth stock seems like the least we can ask from bulls trying to put together a meaningful recovery. 

If the stock can't hold its bid, it probably means risk appetite is still very weak. That would put the pressure on for the real tech winners the rest of the week to save the day.

Charles Schwab and all third parties mentioned are separate and unaffiliated, and are not responsible for one another's policies, services or opinions.