The point where you might want to buy Tesla shares

The point where you might want to buy Tesla shares

By Lawrence Lewitinn

This has been a great year for Tesla. But is the run over for the luxury carmaker?

Since hitting a peak on Sept.4, shares in the electric car company are down 11 percent. But year-to-date Tesla is up an astounding 66 percent.

For founder Elon Musk, that means his shares have lost over $1 billion in value since the start of this month. But don’t feel so bad for him, though; Musk’s 28.3 million Tesla shares mean he still has $7 billion worth of shares.

Musk most likely can afford to lose that much, but other investors may not be so lucky. So is perhaps now the time to sell Tesla’s stock?

Gina Sanchez, founder of Chantico Global, has concerns about Tesla’s ambition to sell 100,000 cars sold in 2015. Last year, they sold 22,450 Model S cars. Just for comparison’s sake, the world’s largest carmaker, Toyota, sold nearly 10 million vehicles in 2014.

Tesla “may fall short of their 2015 target of 100,000 cars,” said Sanchez, a CNBC contributor. “That is not a good sign because as soon as you start falling short of one goal, the next goal starts to fall.”

Compounding Tesla stock’s problem is its sensitivity to the market. “The market itself is weak,” Sanchez said. “You do have to think about this weakness as something that could be potentially troubling for Tesla.”

For Richard Ross, global technical strategist at Auerbach Grayson, Tesla’s charts are saying something loud and clear.

“The technicals are telling me that Tesla is a sell,” said Ross, a “Talking Numbers” contributor.

Since May, Tesla shares were trading above a well-defined trendline and held its 200-day moving average, Ross said. That culminated with a break above its March highs.

“But a failed attempt to eclipse that key $300 level has turned that breakout into a breakdown,” Rosssaid. “We have fallen below that prior resistance. We’ve taken out the trendline and the 50-day moving average all in one fell swoop. That has opened the door to a fast move down to that 200-day moving average.”

The 200-day moving average is currently around the $212 per share level. Ross sees that as a potential target, and he thinks it may even get to $200.

“I would be a seller of the stock right here,” Ross recommends. “Even for longer-term investors, this is not a compelling entry point. You can be patient on Tesla.”