Tesla topped over $280 on the last day of its "Time at Mode" 9-day rally.
I posted a chart two weeks ago outlining that day.
Now the key is to look at how to trade a return back to the key 9-day support/breakout level.
I view the negative comments about TSLA's overvaluation by Morgan Stanley today as logical and rational. The shorts are getting a break on their massive losses so far this year. There is still 30%+ of the float still short this stock and any weakness will be met with short-covering demand. With a $33 billion market cap and only $2.4 billion in trailing 12-month sales, TSLA is in the ranks of many of the crazed internet stocks that are "floating" in the public market. Overall, if you are LONG TESLA, you do want to be short an equal amount of the "MARKET" in the form of IWM (Russell 2000) to hedge your position.
Tesla is trading on the future success of Model-X and the potentially market-dominating production of batteries. WIth all of the news out for the time being in TSLA, together with a long string of upgrades from analysts, there are few short-term catalysts to drive shares higher. This is the perfect time for shares to come under pressure.
Look for your spots to buy and this is also a great time to sell calls against TSLA at 290 for 6-months or more. There is a good chance that TSLA beats a sideways path from here for the next year as news rolls in and production/sales estimates get revised and updated.
Check out Youtube for my "time at mode" analysis from last week on TSLA.
Tim
10:41AM EST 261.77 last TSLA
I posted a chart two weeks ago outlining that day.
Now the key is to look at how to trade a return back to the key 9-day support/breakout level.
I view the negative comments about TSLA's overvaluation by Morgan Stanley today as logical and rational. The shorts are getting a break on their massive losses so far this year. There is still 30%+ of the float still short this stock and any weakness will be met with short-covering demand. With a $33 billion market cap and only $2.4 billion in trailing 12-month sales, TSLA is in the ranks of many of the crazed internet stocks that are "floating" in the public market. Overall, if you are LONG TESLA, you do want to be short an equal amount of the "MARKET" in the form of IWM (Russell 2000) to hedge your position.
Tesla is trading on the future success of Model-X and the potentially market-dominating production of batteries. WIth all of the news out for the time being in TSLA, together with a long string of upgrades from analysts, there are few short-term catalysts to drive shares higher. This is the perfect time for shares to come under pressure.
Look for your spots to buy and this is also a great time to sell calls against TSLA at 290 for 6-months or more. There is a good chance that TSLA beats a sideways path from here for the next year as news rolls in and production/sales estimates get revised and updated.
Check out Youtube for my "time at mode" analysis from last week on TSLA.
Tim
10:41AM EST 261.77 last TSLA
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