Retail investors are dumping Tesla stock and no longer buying the dip
A number of notable analysts have published investor notes highlighting their on-going concerns with the broader economy and why volatility is likely to continue for Tesla $TSLA stock.
Vanda Research advised investors that "Apple and Tesla...may be the last bastions of hope for the retail community"
The note advised investors that the odds of retail capitulation has increased significantly over the last fortnight thanks to hard money data pointing to the sell-off worsening as the global crisis continues.
"The typical path to retail capitulation is sudden and swift; therefore, we are paying close attention to any further deteriorating internals.”
Another indication that sentiment is shifting negative is the lack of retail money buying the dip. This appears to be led by bearish sentiment that stocks will continue to fall over the next six months. In a survey by American Association of Individual Investors, they found that 60.8 percentage of investors surveyed believed prices will continue to fall.
It’s the first time since 1987, when the survey first began, that pessimism is above 60 per cent on consecutive weeks.
The chart below is the Sentiment Survey since May 2022.