It has not been an easy run for Tesla (NASDAQ:TSLA) lately. After all, shares of TSLA stock are down 38% from the high. While you could say it’s been a tough run for most stocks, Tesla has some specifics surrounding its situation. Mainly, the drama surrounding CEO Elon Musk and his purchase of Twitter (NYSE:TWTR) has had a negative impact. That’s particularly true when combined with market-wide volatility.
Now the company is reducing production at its Shanghai plant, Tesla’s most productive factory. After finally reopening on April 19 — following shutdowns due to lockdowns in China — the company is finally exporting from the country. However, the production issues come from a parts shortage.
Time will tell how this will affect Tesla’s numbers, but Musk optimistically said, “I’ve had some conversations with the Chinese government in recent days, and it’s clear that the lockdowns are being lifted rapidly, so I would not expect this to be a significant issue in the coming weeks.”
But that’s not why Cathie Wood sold TSLA stock.
Given that TSLA stock is the top holding in the Ark Innovation Fund (NYSEARCA:ARKK), it was likely just a move to free up some cash. Wood has been busy buying the dip in all of her favorite stocks. That’s despite the enormous correction we’ve seen thus far in 2022. However, GM is a new addition to the portfolio.
So no, it’s not that Wood is suddenly bearish on TSLA stock and throwing in the towel. If anything, that’s the last thing we would expect from her. It’s been one of the few meaningful stocks in the ARKK fund that has held up to some degree.
On the chart, you can see TSLA stock teetering on the 21-month moving average. If it can hold this area and rotate back up through the April low near $822, it could see a move up to the $870 to $900 area.
On the downside, though, a further decline below $750 could open the door down to the $700 level. That mark is the 2022 low from late February.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.