Under the plunge, even Elon Musk's "die-hard fans" are starting to exit. Will Tesla fall below $200 in the short term?

As Tesla's stock price continues to plummet, even the usually steadfast retail investors are beginning to retreat and observe. As the stock with the largest decline in the S&P 500 index this year, the downturn of this electric vehicle giant has raised concerns among global investors. Even on Monday evening, President Trump personally intervened, announcing that he would purchase a Tesla to show his support.

On March 12, Bloomberg reported that Trump selected a red Model S at the White House on Tuesday, and that day Tesla's stock price rose by 3.8%, but this was merely a slight recovery from the previous trading day's 15% drop. Currently, its stock price has fallen 52% from the historical high set in mid-December and has given back all the profits based on Musk's close relationship with the president after the election.

Brian Mulberry, a portfolio manager at Zacks Investment Management, which held over 270,000 shares of Tesla stock as of the end of last December, stated:

"Currently, this stock is completely driven by emotions, and short-selling pressure is prevailing. There is still room for the stock price to decline in the next 30-60 days, and it could easily drop to $200 or even lower in the short term."

Wall Street analysts are also becoming increasingly cautious, with at least four analysts lowering their target prices in just the past week, and two long-term bullish analysts warning of weak sales and "negative" sentiment.

Moreover, the few remaining "die-hard fans" of the stock are also beginning to waver. Retail traders, who were originally the main force supporting the stock price, have seen net purchases of $2.8 billion in Tesla stock since last Tuesday, according to Emma Wu, a global quantitative and derivatives strategist at JP Morgan. However, some cracks are already showing. The author of a popular post wrote on Reddit on Tuesday:

"I have held on, but at this point, I am starting to doubt my decision."

The Downward Trend is Unstoppable, High Valuation Poses Risks

Currently, the problem facing investors is that there are few catalysts to boost sentiment in the short term. The updates on fully autonomous driving technology or robot taxis are still far off, and Musk's excessive focus on government efficiency has raised concerns that he is unable to manage the car company. Meanwhile, the Republican government's strong opposition to electric vehicles will affect market demand in the U.S., and Tesla's global sales in Europe and Australia continue to decline.

At the same time, with increasing uncertainty surrounding Trump's trade policies and concerns about an economic slowdown, overall risk appetite has weakened in recent weeks, and the stock has truly lost its support. Adam Sarhan, founder of 50 Park Investments, stated, "Unless the market is willing to reward Trump and Musk's efforts, this stock will continue to decline, this stock has not yet found its bottom."

In terms of valuation, even after the pullback, Tesla is still trading at levels far exceeding other large tech stocks. As of Monday's close, its stock price corresponds to a forward P/E ratio of 75, while the average for the "seven giants" is 25, and about 20 for S&P 500 constituents However, analysts believe:

"This high valuation, combined with Tesla's popularity among risk and momentum traders, makes it susceptible to severe sell-offs, but also means that any recovery, once it occurs, could be rapid and strong."

Mark Newton, the technical strategy chief at Fundstrat, warned that Tesla is currently in free fall, making it difficult for short-term investors to buy on dips. Those trying to sell quickly and then repurchase are playing a dangerous game