Can The Pullback Tesla Buy Now? Traders: Neither fundamental nor technical support is supported

Source: Financial community

One trader said that while analysts have been optimistic recently, now is not the time to buy Tesla.

Shares of the electric car maker rose nearly 2 percent on Wednesday after Deutsche Bank reiterated its buy rating, saying no competitor in the United States could match Tesla's market leadership. New Street Research also gave a Wall Street highest price target nearly 48 percent higher than TSLA's closing price on Tuesday.

John Petrides, portfolio manager at Tocqueville Asset Management, told CNBC's Trading Nation section on Wednesday that while TSLA has fallen 6 percent since Nov. 1, it is still far from the ideal entry point.

He said: "Take a step back and ask yourself, if you didn't hold this stock today, would you buy it?" From a fundamental point of view, it is difficult to get in the car right now. ”

Petrides warned that Tesla may dominate the electric vehicle market, but its share price is trading at very high multiples: the price-to-sales ratio is about 22 times, the ratio of profit before interest, tax, depreciation and amortization of corporate value is 180 times, and the price-to-earnings ratio is nearly 160 times.

"I think the standards are set so high that this stock simply can't find a margin of safety," he said. ”

Miller Tabak's Matt Maley said in the same interview show that Tesla also has technical risks.

The agency's chief market strategist warned that liquidity-driven stocks such as Tesla could face difficulties in 2022 as the Fed considers a schedule for accelerating tightening and the Chinese government's restrictions on corporate debt, leverage and risk-taking.

"Even if Deutsche Bank's prediction of the fundamentals is correct, some of these innovative stocks will have to pull back a little," Maley said. ”

He said that as Tesla fell to key support on the 50-day moving average, a break below that level could signal more trouble.

"If it breaks below this level (just below $1,000), it will not only fall below the 50-day moving average, but it will also hit its first lower low in 6 months," he said. ”

Maley said: "If it falls below this level, Tesla will very likely fall further, and may even fall to the 200-day moving average." ”