Cathie Wood and her Ark Invest funds loaded up on Tesla (TSLA) Thursday as TSLA stock fell below its 200-day moving average, extending recent losses.
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The TSLA dip and subsequent Cathie Wood buys Thursday were followed by Tesla’s decision to cut China vehicle prices on the Model 3 and two Model Y variants.
Tesla stock kept falling early Friday.
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Cathie Wood’s Ark Investment Management bought 112,475 TSLA shares Thursday, according to the company’s daily trade disclosure. Based on the closing price of 227.22, Wood spent $25.56 million on the Tesla stock purchases.
Wood’s Tesla trades were done through the ARK Innovation ETF (ARKK) and ARK Next Generation Internet (ARKW). As of Jan. 12, TSLA sits second in ARKK with a 7.9% weight. Meanwhile, Tesla stock is the sixth ranked holding in ARKW, with a 5.2% weight.
Futures Fall Amid Big Earnings; Tesla Cuts Prices
Cathie Wood began purchasing Tesla stock again in late December after she repeatedly sold TSLA in the past eight months. Early in 2023, Wood pounced on Tesla as the stock traded below its 200-day moving average.
Cathie Wood’s Ark tends to buy stocks when they’re falling or well off highs.
Tesla stock angled down around 3% Friday during premarket action amid the news the EV giant is continuing to drop prices on its vehicles. On Thursday, TSLA shares declined 2.9% to 227.22, falling below the 200-day average.
In a statement to Reuters Thursday Tesla also confirmed it will suspend most vehicle production at its Berlin plant between Jan. 29-Feb. 11, citing shipping disruptions.
“The armed conflicts in the Red Sea and the associated shifts in transport routes between Europe and Asia via the Cape of Good Hope are also having an impact on production in Gruenheide,” Tesla said in a statement. “The considerably longer transportation times are creating a gap in supply chains.”
Cathie Wood: Tesla Stock Performance
Tesla stock is in an awkward double-bottom base with a 278.98 buy point according to MarketSmith analysis. The stock had forged a handle, but the midpoint is now below the midpoint of the base, making it no longer valid. On Tuesday, TLSA undercut the 50-day moving average.
The relative strength line, which tracks a stock’s performance vs. the S&P 500, is at its lowest level since late May, according to MarketSmith.
In 2023, Tesla doubled, easily outperforming the broader S&P 500 index. Tesla stock ranks fifth in the 35 member IBD Auto Manufacturers industry group. The Cathie Wood stock has a 75 Composite Rating out of a best-possible 99. Tesla also has a 78 Relative Strength Rating and an 88 EPS Rating.
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