Tesla On Track To Drop Out Of 20 Top-Valuation Stocks As Shares Drop Another 3% Wednesday Premarket

Update: Tesla shares have recouped since the publication of this story, trading 2.6% higher at $111.95 around 6:30 a.m. EST.

Tesla Inc. (NASDAQ: TSLA) shares were lower in premarket trading on Wednesday, suggesting the beaten-down stock might decline for an eighth straight session.

What Happened: Tesla’s weakness now reflects primarily a technical sell-off, as the stock takes out one support after another.

On Tuesday, it closed below $110, the upper bound of a support area from mid-2020. It remains to be seen if the stock can hold support at $94, which happens to be the lower bound of the region.

See Also: Best Electric Vehicle Stocks

The slump that intensified in December began as a negative reaction to Tesla’s production and demand problems in China. Investors are worried about a potential fourth-quarter shortfall. Signaling that the weakness may stretch beyond the fourth quarter, a Reuters report said on Tuesday that the company is planning to go with a trimmed planned production plan at its Giga Shanghai plant in January.

Tesla is now at risk of dropping out of the top 20 companies in terms of market capitalization. From a peak of over $1.2 trillion in early November 2021, the market cap has fallen to $344 billion at Tuesday’s close.

Price Action: In premarket trading on Wednesday, Tesla shares were down 3.55%, to $105.23, according to Benzinga Pro data.