Tesla Motors Inc (NASDAQ:TSLA) and other momentum stocks were hit fairly hard on Monday as the markets pulled back on concerns about the crisis in Ukraine. Tesla declined nearly 4% after dipping deeper than that earlier in the day. The story was similar with fellow momentum stock Netflix, Inc. (NASDAQ:NFLX), which fell more than 6% on Monday. However, Tesla showed signs of rebounding in premarket trading, while Netflix didn’t.
Analysts debate buying opportunity for Tesla
Many analysts have been warning that a pullback is coming for Tesla Motors Inc (NASDAQ:TSLA), although those warnings have been largely related to an expected correction in the stock price. Monday’s pullback was part of the greater market rather than Tesla itself. As a result, one expert interviewed by CNBC says this is an excellent buying opportunity for Tesla.
Brian Kelly of Brian Kelly Capital told Fast Money that investors who want to get into a momentum stock while share prices are pulling back might want to consider Tesla Motors Inc (NASDAQ:TSLA). About Tesla, he said, “To me, if you’re going to get into something, that’s the place to go.
China, copper, bond markets deny weakness
He also said other weakened momentum stocks could present buying opportunities for momentum-minded investors. He noted that the copper and U.S. bond markets did not provide confirmation of weakness in the market. In addition, China PMI numbers were strong overnight.
Tim Seymour of Emerging Money also noted that China’s economic metrics were strong, saying that just because a few momentum stocks like Tesla Motors Inc (NASDAQ:TSLA) pulled back, it isn’t a reason to start getting out of the market.
Tesla’s sales model problems could shift
The analyst also suggested that consumer demand for Tesla Motors Inc (NASDAQ:TSLA)’s Model S sedan could begin to change the challenges to the automaker’s direct to consumer sales model. New Jersey is the most recent state to ban Tesla from selling directly to consumers in the state.