Tesla is not a Corona winner. Fundamental valuation is extremely high. Recent earnings do not provide comfort about operating level profitability. Retail investors entered the market -> irrational excess. Chart pattern indicating break of trend. Trading thesis: Short.
Your going short right before the S&P inclusion 😅? That's just dumb...
MK5G
⋅
@mentalCraft45427, Inclusion into the Index has historically resulted in no significant abnormal returns. The assumption is, that this information is already in the price leading up to the inclusion. See the related Bloomberg article.
logicalBird1984
⋅
@MK5G, and what about all the hedge funds and investment firms that will have to buy the stock once it is included?
MK5G
⋅
@logicalBird64109, no clear answer on that one. But because the index inclusion of Tesla is a well known likelihood, this may already be in the price. Maybe the current sideways movement is part of that already. I understand that the announcement of the potential inclusion has no certain date. It may still come as a surprise to some.
logicalBird1984
⋅
@MK5G, OK thanks for trying to clear that up. Seems like Tesla will surprise everyone. To me seems like it broke out of a gravity field most other stock are held into. One of the few that are strong enough to find their own orbits. Who knows where it will go from here.
MK5G
⋅
@logicalBird64109, certainly has gone up like a space x rocket. But at some point, reality will prevail - but you can never say when. From a probabilistic point of view, I would say there is a decent chance that a short strategy can pay off at some point.