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Tesla shares break 7-day losing streak

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Tesla (TSLA) stock ended higher today, snapping a brutal 7-day losing streak for the stock.

However, it’s a brief respite for investors, with the stock down more than 17% over the past 5 days, 42% over the past month, and a staggering 68% for the year.

Some traders and market technicians are seeing the $100 level as support for the stock, something that was unthinkable just a few months ago.

But the latest news out of China says the automaker has extended its holiday break as COVID cases soar in the region following the government’s relaxation of zero-COVID policies. The automaker will also have a longer Chinese New Year holiday for employees than it normally would in January, although Tesla China said it was giving workers more time to travel home for the holiday.

But of course, it’s not just news out of China that is weighing on equities. It’s CEO Elon Musk’s recent activities.

The time Musk spent on Twitter running his newest company as CEO had Wall Street investors and analysts howling as they begged Musk to return to Tesla. One analyst went so far as to say that Musk is “asleep at the wheel” during a crucial time for the company.

Musk’s large Tesla stock sales aren’t helping the matter, which many believe is being used to fund his Twitter buyout. Less than two weeks ago, Musk disclosed that he sold 22 million shares of Tesla, worth $3.6 billion.

The total amount of shares Musk has sold since April, when he announced his offer to buy Twitter, has stood at $23 billion – and in the year Musk has unloaded $40 billion in shares.

LUSAIL CITY, QATAR - DECEMBER 18: Jared Kushner and Elon Musk watch during the Qatar 2022 FIFA World Cup Final between Argentina and France at Lusail Stadium on December 18, 2022 in Lusail city, Qatar.  (Photo by Dan Mullan/Getty Images)

LUSAIL CITY, QATAR – DECEMBER 18: Jared Kushner and Elon Musk watch during the Qatar 2022 FIFA World Cup Final between Argentina and France at Lusail Stadium on December 18, 2022 in Lusail city, Qatar. (Photo by Dan Mullan/Getty Images)

The cumulative effect of those sales weighed heavily on Tesla stock, one that has a relatively high percentage of individual shareholders as opposed to institutional ownership, and one of the best-selling stocks on the market. The lack of strong institutional support and a high level of short interest is a recipe for disaster for Tesla’s bulls.

However, there are some potential positive catalysts for the stock. Right after the New Year’s break, investors will be keeping an eye on Tesla’s fourth quarter delivery report. The Street is looking for deliveries of 422,000 worldwide, according to Bloomberg estimates.

Additionally, Tesla is still ramping up production at Giga Austin and Giga Berlin, both hitting new production milestones. Analysts like Oppenheimer’s Colin Rusch believe that Tesla is still reducing the cost of manufacturing electric vehicles in the long term, and other manufacturers will struggle to match its efficiency in the future.

Speaking of the not-too-distant future, starting January 1st, Tesla will again be eligible for federal tax credits for the purchase of certain electric vehicles, thanks to the Inflation Reduction Act. With the Treasury Department delaying new rules for battery material requirements and sourcing, cheaper Tesla EVs like the Model 3 and Model Y will be eligible for the full $7,500 tax credit, depending on the income level of the buyer.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on twitter is on Instagram.

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