Photo: Bloomberg
Photo: Bloomberg

Tesla Stock Dropped Today

Shares of Tesla (NASDAQ:TSLA) fell, extending a brutal decline in the electric vehicle maker's stock price since it hit new highs in late January. By the close of trading, Tesla's stock price was down 4% after falling as much as 13% earlier in the day.

Buoyed by optimism about its leadership within the fast-growing EV market and potential within the renewable energy industry, Tesla's shares soared to a record high of $900.40 on Jan. 25. Yet since that time, the stock has plunged roughly 33%. Tesla's market capitalization, in turn, has fallen from $864 billion to $574 billion during that time.

Concerns regarding intensifying competition are growing among investors. NIO, Li Motors, and XPeng are nipping away at Tesla's EV market share in China. At the same time, Ford Motor is wrestling away share from Tesla in the U.S. with its new Mustang Mach-E, according to Morgan Stanley.

Meanwhile, longtime Tesla bulls are taking profits. Billionaire fund manager Ron Baron told CNBC that his firm, Baron Capital, sold 1.8 million shares of Tesla in recent months for "risk mitigation" purposes. The sales come despite Baron's calls for Tesla's stock price to reach $2,000 within the next decade.

These extreme moves in Tesla's share price show just how difficult it can be to determine the value of a business that competes in a dynamic new industry. With analysts and investors likely to struggle with their attempts to accurately value Tesla's stock for the foreseeable future, shareholders should brace themselves for continued volatility.

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Dow Jones Futures

Dow Jones futures will open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.

Shopify (TSX:SHOP) Stock Is Down 30%

Shopify (TSX:SHOP)(NYSE:SHOP) stock benefitted greatly from the lockdowns and the shutdowns. Its e-commerce platform was already starting to take off. The pandemic just pressed fast forward on this trend. As businesses flocked to the e-commerce facilitator, Shopify’s stock price soared.

Today, the vaccine is making its way through populations. We can really see the beginning of the end of the virus and its associated economic pain. This is causing investors to shift focus. There are many sectors and stocks that are grossly undervalued. It is these stocks that have borne the brunt of the shutdowns. But today, it’s also these stocks that are undervalued. Stocks like Shopify, however, are widely held. They’re arguably overvalued (at least in the short term) and due for a correction.

We are seeing just this. Shopify stock is down almost 25% from its 2021 highs.

Photo: Getty Images
Photo: Getty Images

Disney Stock

Disney nudged up 0.4% to 189.84 last week, holding in range from a 183.50 flat-base buy point, according to MarketSmith analysis.

Late Friday, California said theme parks and stadiums could reopen with limited capacity starting April 1. That's good news for Disney. Under the state's new guidelines, cases in Orange County still need to fall further before Anaheim-based Disneyland could open. With vaccinations ramping up and cases trending lower, Disneyland looks like to open in some capacity in the near future.

Shares rose 2.5% in late Friday trading to 194.77. That would push Disney stock above the 5% chase zone. However, aggressive investors could treat DIS stock as potentially actionable, breaking a downtrend in a mini-consolidation. Existing holders might use this as slight add-on buying opportunity.

**To read more about stock price daily, CLICK HERE!

Google Stock

Google stock rose 3.7% to 2,097.07 last week. Nearly all of that gain came on Friday, as shares rebounded from the 21-day line and broke a short downtrend in higher volume.

GOOGL stock has a three-weeks-tight pattern with a buy point of 2,145.24, according to MarketSmith chart analysis.

The relative strength line is at a record high, signaling Google's outperformance vs. the S&P 500.

In a confirmedstock market rally, Google stock would already look like an aggressive entry or swing trade.

Microsoft Stock

The tech and cloud giant dipped 0.3% to 231.60, but pared weekly losses on Friday to close back above its 50-day and 10-week. Microsoft stock is just below a 232.96 buy point after breaking out earlier, but the entry is still valid. Getting above that level also is likely to mean breaking a downtrend and retaking the 21-day line.

The relative strength line for Microsoft is not great, trending lower since July. But aside from Google, Microsoft has held up better in the last few weeks than most tech stocks.

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Stock Market Analysis

The stock market rally suffered a fatal blow last week, with the major indexes breaking below key support levels by Thursday's close.

On Monday, the Nasdaq rebounded from its 50-day line to peek above its 21-day exponential moving average, just shy of its Feb. 24 highs. Volume was notably weak, however. On Tuesday, the Nasdaq fell back to its 50-day line. On Wednesday, the composite plunged through its 50-day and slightly undercut its recent lows. On Thursday, the Nasdaq broke well below those areas.

Meanwhile, the S&P 500's low-volume Monday rally was surrounded by higher-volume sell-offs. On Thursday, the benchmark index tumbled well below its 50-day line. By Thursday's close the Dow Jones was slightly below its 50-day and the small-cap Russell 2000 just above it.

During this time, leading stocks suffered losses. Growth names plunged, many to or below their 200-day lines. Even cyclical names came under pressure on Wednesday-Thursday.

So a stock market correction call at Thursday's close was easy to make.