What a time to be alive. These types of moves create a significant transfer of wealth, for the long's this has been a multi-year battle from $175 - $350 and now in a span just longer than a full month we're at $537.92 at market close January 14, 2019
This type of price action extends beyond fundamentals, and at this point is primarily dictated by human sentiment with a bunch of algorithms following (not the other way around)- good news for us, Elliott Wave analysis does some good in the department of predicting price action in periods of euphoria- these euphoric moves in price action almost always occur in the third wave. I have two scenarios or wave counts I have considered, one where the peak of price action today is the top of wave 3 or the conclusion of wave 5. I'm publishing the later, in both scenarios price action retraces.
Considering other technical indicators, the broader stock market soaring into uncharted territory, and retail sentiment I'm leaning towards the conclusion of a fifth wave, leading into a larger correction. The 0.50 fib retracement lines up neatly with a historic level of resistance (now support) for Tesla shareholders in the $380's
Perhaps there is more upside following the correction- something to consider for a later time -- or, sooner rather than later if the Tesla bulls continue to maintain the squeeze. If up is the direction from here- I haven't the slightest clue where the top is after this.
At the time of publishing this chart I hold $425 TSLA put contracts If the price action continues to strengthen the probability of this wave count I intend to further short the trade with additional options
Tom
Trade closed: stop reached
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Contracts expired worthless, TSLA continues to run.
I fully agree with this madness totally disconnect from reality and fundamentals , nothing justifies the price double in two months , not the china made car , not the better sales , not the future prospect of the Chinese market
Dont get me wrong I loved to own Tesla for years and I believe they will become a key player in the future of cars , But the price ppl are buying today is madness , and I own one model 3 and love it lollll
Time for me to make again money on the other side
Question my friend what was the explique date of your put option for 425 $ target ??? this is key info to me
My guess is the next earnings call will be back to reality time and the same computer bolts will reverse the trades with huge profit faster than anyone investors leaving the later buyer with significant loses
Wo I love this one it is a matter of time and one need to be timing it nicely , please I need your brains guys
@PhilippeDelpCFA, Hi Phillippe, my $425 puts are 1/24 and 1/31 - neither of which I anticipate will go in the money by then, however on the first significant pullback I anticipate the premiums to increase whereby I'll just trade the premium. Alternatively shorting the common stock or contracts with an extended time into Februrary/March are in consideration for me.
PhilippeDelpCFA
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@tomthetrader1, I understand what you try to do by time frame seems short to me but you might be right who knows
safe buy with maturity beyond the earnings call lets say end of February your strike is only 20% lower which to me in this type of correction is warranted
I will play bigger by buying at or near the money Puts around 10 % exp end of February , can always sell the increase in volatility or the delta before exp.
Thanks for your input
tomthetrader1
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@PhilippeDelpCFA, You're welcome & I appreciate you sharing your perspective too.
Morchella
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I was also targeting put options in the range of 380 - 425 with expiration date right after the earning call (Feb - Mar).
My fear though is that even with bad news, the bulls will neglect the fundamentals and still continue to buy the long term "Tesla vision"...
I'm not a financial analyst but I think you don't have to be one to assert the stock is in the same configuration as Bitcoin in December 2017...
@apples34, 1/24 & 1/31 - I do not anticipate either to go in the money by then, however I will trade the contract premiums with the increase volatility when/if a pullback occurs. If the common shares offer an appropriate borrow rate I will consider utilizing that mechanism to further short the trade
PhilippeDelpCFA
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NVM I CLOSED MINE WHEN THE PUTS LOST 50% and understood it was too early
Better watch early signs of collapse before shorting
You know 95% of hunting is waiting and watching lolll
So wait and watch it will come, earnings is coming
Dont get me wrong I loved to own Tesla for years and I believe they will become a key player in the future of cars , But the price ppl are buying today is madness , and I own one model 3 and love it lollll
Time for me to make again money on the other side
Question my friend what was the explique date of your put option for 425 $ target ??? this is key info to me
My guess is the next earnings call will be back to reality time and the same computer bolts will reverse the trades with huge profit faster than anyone investors leaving the later buyer with significant loses
Wo I love this one it is a matter of time and one need to be timing it nicely , please I need your brains guys