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Tesla stock suffers biggest fall since September 2020

Shares plunged 8.55% to close at 714.50 on the stock market today, giving up nearly all their since the new year began.

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Tesla stock has now knifed through its 50-day moving average, according to MarketSmith chart analysis. Investors could lighten their position on Tesla stock, though they could also wait for a weekly close below the 10-week line before acknowledging a sell signal.

It’s Tesla’s biggest drop since Sept. 23, 2020, when it closed down 10.34%.

Shares of the company’s Big Tech peers also dropped Monday, with Apple, Amazon and Microsoft each closing down more than 2%. Overall, the Nasdaq Composite fell 2.5% on Monday, while the Dow Jones Industrial Average reversed a 200-point loss to close up 0.1%.

Elon Musk has upped his Twitter game, sending holders of Bitcoin and Tesla Inc. scrambling during another bout of self-reflection.

The world’s richest man helped to send the prices of both tumbling Monday in the wake of his weekend comments that the prices of Bitcoin and smaller rival Ether “do seem high.”

The tweet came two weeks after Tesla announced it has added $1.5 billion in Bitcoin to its balance sheet, triggering a 50% price jump in the already surging digital asset. Bitcoin climbed off its lows of the day, while Tesla closed down 8.6%.

Tesla’s stock could also have been dragged down from Bitcoin, which slowed its rally on Monday. The coin was down about 6% after the bell Monday, according to CoinDesk.

Earlier this month, Tesla disclosed it bought $1.5 billion worth of Bitcoin for “more flexibility to further diversify and maximize returns on our cash.” The company also said it plans to start accepting payment in Bitcoin.

The company is “on a trajectory to make more from its Bitcoin investments than profits from selling its EV (electric vehicle) cars in all of 2020,” Wedbush Securities analyst Daniel Ives said in a research note over the weekend.

Tesla, an IBD Leaderboard stock, flashed several signals of a climax top in early January, which could mean the stock has reached its top and might be due for a pullback.

The stock has an RS Rating of 96 and EPS Rating of 74. Its relative strength line is trending lower.

Among legacy automakers with a growing presence in the EV market, GM fell 1.1%, Ford climbed 1%, Nissan fell 1.15% and Volkswagen rose 2.2%.

China-based EV stocks Nio (NIO) tumbled 7.9% and Xpeng (XPEV) dropped 7%.

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