Retail traders keep faith with Tesla: Trading volumes surge

According to online retail trading platform, Capital.com, bullish market sentiment on Tesla stock appears to be on the rise, reflected by the surge in trading volumes and the growing number of long CFD positions in Tesla (TSLA) in the past week.

According to data from Capital.com, global traders have been strong buyers of TSLA every day last week (2-6 Jan 2023) with total trading volumes up by more than 36% from the previous week. TSLA was the most traded single stock name on the Capital.com platform last week reaching trading volumes in excess of USD170m.

Traders also began to gradually increase their long positions in TSLA last week with net long positions in TSLA CFDs inching towards 73% vs 67% a week earlier. This change in sentiment might suggest traders are beginning to see TSLA as a ‘buy’ opportunity.

Justin Mcqueen, Market Specialist at Capital.com, said: “December was a torrid month for Tesla, which saw its shares fall by more than 35%, in part due to tax-loss selling activity. But based on Capital.com’s recent data, traders are increasingly buying up TSLA again. They have begun to use Tesla’s sizable dip to pile back into the shares. 

“Tesla’s Relative Strength Index (RSI) has fallen to its most oversold level in its history, perhaps leading traders to believe that TSLA is due for a correction. As such, in light of Tesla recently reporting price cuts to its products in China and deliveries at 5-month lows amid weak demand, there is a sense that a lot of negative news has been reflected in the price and thus we are seeing an unwinding of that bearishness.

“After a quarter of trading activity driven by company-specific factors, this week TSLA might be influenced by macro forces like interest rate expectations ahead of the US CPI release on Friday. A lower-than-expected print might be favourable for TSLA since it could signal the end of Fed monetary tightening in Q1 23.”

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