Part 6/10:
Technical indicators also reflect a buy opportunity. The Relative Strength Index (RSI), a momentum oscillator measuring overbought or oversold conditions, has fallen below 30 — historically signaling a buy signal. Tesla’s RSI at around 28 indicates the stock is oversold and could be poised for a rebound.
Historically, similar low RSI levels have been seen before significant recovery periods for Tesla, such as in early 2019. At present, Tesla’s valuation, with a trailing Price-to-Earnings ratio (P/E) of about 37, is comparable to that of McDonald’s, which is growing at a much slower rate. This suggests that Tesla is currently being priced more like a traditional car manufacturer rather than a technology-driven growth stock, which could be an undervaluation opportunity.