Tesla hits bearish territory day after Jim Cramer calls it a ‘strong stock’

While the stock recommendation track record of the energetic host of Mad Money – Jim Cramer – is, in fact, sold, he has also made a fair share of significant mistakes.

Many of his blunders have proven notable – either by the magnitude of the stock market’s move or the suddenness with which his predictions prove untrue – leading to the emergence of the internet meme known sometimes as the ‘Cramer Curse.’

The latest victim of the so-called ‘Cramer Curse’ appears to be Elon Musk’s electric vehicle (EV) maker, Tesla Motors (NASDAQ: TSLA), whose shares entered a bearish breakout just a day after Cramer called it a ‘strong stock.’

Tesla stock begins collapsing one day after Cramer endorsed TSLA

The rapid confirmation of a descending triangle pattern in TSLA shares suggests that lower lows may be ahead, which could validate an ‘Inverse Cramer’ strategy. However, it’s important to note that Cramer’s positive remarks were focused on Tesla’s long-term prospects.

How low will Tesla fall?

Although the long-term bullishness may be justified – particularly should the October ‘Robotaxi’ event prove a success and should Tesla truly launch its humanoid robot in 2025 – TSLA stock is, at press time on August 27, in hot water.

Indeed, though Tesla has been experiencing a combination of strong growth and – as the market remains in the grip of the ‘EV winter’ – steady delivery figures, both the ‘Robotaxi’ and the ‘Optimus’ robot would solidify it as a true technology giant, and not a regular car manufacturer.

Having fallen 1.84% in the initial hours of Tuesday’s trading, Tesla shares, at $209.46, are  below their closest support level as of the latest close and could face a major downtrend.

In general, 2024 has not been the strongest year for Elon Musk’s EV maker as it is, in the morning of August 27, down 16.01% in the year-to-date (YTD) chart, having failed to sustain the strong July upside, which briefly sent it into the green within the time frame after a rocketing from about $187 to above $260.

Perhaps Cramer’s endorsement was more of a speed bump than a boost – proving that even a “strong stock” can hit a pothole on the road to recovery.

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