Momentum investors who held Tesla (TSLA) stock for too long in recent days lost money. TSLA stock peaked at $488.54 and closed at $421.06 last Friday, Dec. 20, 2024.
After the Fed signaled fewer interest rate cuts next year, investors wanted to cut back on their TSLA stock exposure. The electric vehicle market will undergo a worsening recession. Although Tesla will dominate the EV market, followed by Rivian (RIVN), consumers will opt for cheaper alternatives.
Hybrid vehicles have a better range and use cases for people who are in colder regions. Toyota (TM) will thrive in the hybrid market. TM stock tested the $170 support level starting in August 2024. Since mid-October, the stock barely moved by more than $10. At an 8.5 times P/E, TM stock is due to rally.
Investors should avoid Honda Motor (HMC). Rumors of a partnership with Nissan are a red flag. Nissan does not help improve Honda’s product quality. However, it might help lower operational costs.
Ford Motor (F) is less appealing. The P/E is 11.3 times, while the forward P/E is only 5.8 times. Ford trades at a discount because shareholders expect ongoing quality issues to increase costs and hurt profits. Ford also lost billions in the EV sector. It still needs to build more units of hybrid vehicles.
