Tesla Stock Price Falls - and Oil Prices Aren't the Big Problem

The Tesla stock price opened at $212.38 today (Thursday), which means the stock has fallen 27.1% since the all-time high it hit in September.

TSLA stock's dip has coincided with the plummet in crude oil prices. While falling oil prices are part of the reason for TSLA's drop, there's more to this story...

At this week's five-year low of $53.60 a barrel, WTI crude oil is now down 47.7% in the last six months. Brent oil trades just above $61 a barrel today. The global benchmark priced over $110 a barrel this summer.

Tesla is one of the most volatile stocks on the market. Any hint of either positive or negative news always moves the stock several percentage points.

But tanking oil prices have had a much bigger impact on TSLA than the typical Model S news story or rumor. In fact, this is the worst three-month stretch for TSLA stock since it hit the market in 2010.

The consensus reasoning for the dip is simple: consumers looking for a new car simply don't need an electric vehicle when crude oil prices are so low.

 

But according to Money Morning's Defense and Tech Specialist Michael Robinson, TSLA stock should not be dropping this much due to falling oil prices.

"This is a classic overreaction," Robinson said during his regular appearance on FOX Business last week. "Honestly, people don't buy the Tesla Model S because they think oil prices are going to go up. They buy Tesla for a lot of reasons, one of which is it being a great electric vehicle. But Tesla buyers aren't factoring in whether they're going to pay $4.00 or $2.75 for a gallon of gas. That's not what motivates them."

The Tesla Model S has a base retail price of $69,900. Upgraded versions are priced well over $100,000. Realistically, gas prices would only be an issue for consumers looking for more modestly priced electric vehicles, which Tesla doesn't offer yet.

While much of Wall Street is pointing to oil prices as Tesla's main problem, Robinson has found another reason the stock is underperforming lately. And it's much more important than oil prices for investors to understand ...

The Real Reason TSLA Stock Is Down 27%

You see, there are other bearish indicators coming from TSLA stock.

"Tesla stock rolled over in early September and made one attempt at a rally. But my real demand tracking system shows it was a false breakout," Robinson said. "The Tesla stock price is now below the 50 day simple-moving average and below the 10, 20, and 30-day exponential-moving averages. Those are signs of bearish sentiments from investors."

The company's last earnings report didn't help much either.

At first glance, the Nov. 5 report looked strong. TSLA beat earnings estimates by $0.03. It also reported revenue of $932 million when analysts had expected $889 million in revenue.

However, TSLA failed to meet its delivery goal of 7,800 vehicles in the quarter. It also downgraded its 2014 year-end goal for deliveries. It had originally expected to deliver 35,000 vehicles, but lowered the estimate to 33,000. Finally, Tesla missed its gross margin target when it reported a margin of 23% instead of 27%.

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Right now, Robinson rates Tesla stock as a hold. However, the company does have a lot going on in 2015 as it constructs its massive Tesla Gigafactory in Nevada. The automaker is also expected to unveil a second, more moderately priced vehicle in the year.

While the overall sentiment may be down on TSLA now, there is actually a great buying opportunity for some investors.

"Aggressive traders may want to try a run at around $175 to $182.50," Robinson said. "TSLA stock does appear oversold right now."

As we've stressed at Money Morning throughout 2014, TSLA stock is not for conservative investors. The price swings are just too volatile.

But for investors who are willing to hold on to a stock for a few years and assume some risk, TSLA stock is one of the best options on the market because of its serious growth potential - especially at today's discounted price.

More from Michael Robinson: Last week, Robinson predicted a strong year for tech stocks in 2015. But that doesn't mean every single one is going to be a winner in the New Year. Before you decide which tech stocks to buy in 2015, cross these three off your list immediately...