Tesla drops another 8%, turns negative for the year

3 months ago 22
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Tesla CEO Elon Musk speaks during the unveiling of the new Tesla Model Y in Hawthorne, California on March 14, 2019.

Frederic J. Brown | AFP | Getty Images

Tesla's recent slide continued on Tuesday, as investors rotated out of high-flying tech names.

Shares of the electric vehicle maker dipped 8% in early trading on Tuesday, after losing 8.55% on Monday for the biggest daily loss since Sept. The stock is down 16% for the week, and on Tuesday turned negative for the year.

Tesla is the poster child for disruptive tech stocks, which investors favored during the depths of the pandemic. The tech sector led the market out of the Covid-induced rout last year, but more recently investors have been looking elsewhere. Amid stimulus measures and a widescale vaccine rollout, some of the more beaten-down and cyclical sectors now look more attractive.

Tesla is on track for its third straight week of losses, and amid the recent weakness the stock fell below its 50-day moving average on Monday for the first time since November. Moving averages are a technical indicator used to determine momentum.

Tesla is also now exposed to the swings in bitcoin prices after the company bought $1.5 billion of the cryptocurrency. Bitcoin has dropped 15% in the last 24 hours, and broke below $50,000 on Tuesday, according to data from Coin Metrics.

Tesla shares tumble from their record high

The Elon Musk-led company finished 2020 as one of the top-performing stocks, and that momentum continued into 2021, with the stock hitting an all-time high on Jan. 25. But since that high water mark, the stock has tumbled 20%.

The company is not the only tech name that's experienced selling pressure in recent sessions.

On Monday the tech-heavy Nasdaq Composite dipped 2.46% as Apple, Amazon and Microsoft all fell more than 2%.

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