Tesla has now lost about half its value since its December peak and still trades at over 100 times earnings. But wherever there’s a falling knife, there’s a day trader poised to catch it.
JPMorgan has been crunching numbers on retail trading flows ever since the whole 2021 GameStop saga. The latest instalment of its “Retail Radar” weekly report reveals a whole lot of dip buying. Alphaville’s emphasis below.
Retail traders net bought $12.5B over this past week, +3.2z above 12M average. They broke the $2B threshold for the past four days in a row. It’s worth noting that this level that is more easily reached in a “down” year than in an “up” year: it was rarely seen in 2023/24 (4 times in total), when S&P produced double-digit returns, but occurred 10 times in 2022, concentrated in Feb during the Russia-Ukraine war, and has already happened 16 times this year.
The more granular details are interesting. Of the $12.5bn, about $4.2bn went into ETFs (btw, the industry hit $15.5tn of assets at the end of February). Broad equity market ETFs were the most popular, along with a smattering of bond and gold ETFs.
However, a whopping $8.3bn went into individual stocks over the week, and of that Tesla attracted the lion’s share. Here’s JPMorgan again, with the bank’s emphasis in bold.
Single stocks accounted for +$8.3B of the inflow. TSLA (+$3.2B, +3.5z) and NVDA (+$1.9B, +1.1z) collectively contributed more than half, and the rest of Mag7 contributed another $1B. Notably, they have been buying TSLA for 12 consecutive days, adding $7.3B in total. While this is not the longest consecutive streak of Retail buying in TSLA, it is the highest magnitude among all past “buying streaks” in over a decade.
Here it is, charted (apologies for bad quality image, zoomable version here):
So how is that dip-buying going for retail traders? Well ..
Further reading:
— $1.4bn is a lot to fall through the cracks, even for Tesla (FTAV)
