Based on the earnings
and forecast for the current quarter and beyond, the pace of Tesla
car sales is still quite strong. Tesla
is using all possible funds to drive future growth which is essential. They need to use all free cash flow to make new investments to keep Tesla
ahead of any competition. I don't see any competition from the likes of any other manufacturer. BMW's electric car is not something attractive to me. I personally still crave owning a Tesla
. The styling is beautiful and the driving that I do is perfectly suited to having one. The total cost of driving a Tesla
is more competitive to gasoline engines than people think. Back to trading: The message boards are on fire to beat up on TSLA
on this "stumble" in their forecast and now we will see if the shorts add to their positions here and take advantage of the weak price and try to break it more, or do they use the bad news to cover their shorts. I think it will be a bit of the latter. I think the low price is a good opportunity to buy in to TSLA
, but I am open to it falling as low as 160 now, whereas before I thought it could hold onto the steeper dark green line on this long term ascent and hold the 180's on this earnings
report. So, it is simply the magic of large numbers that will keep TSLA
a more boring, steady stock from here forward. The market cap is high and that keeps a lid on any price appreciation, but it is a great stock for taking advantage of the high options premiums. (Sell covered calls, and sell puts against cash)
NOTE that Tesla's previous earnings
level is 160. That is key support to me.
NOTE that 178 is 12 days of time on the rally in January-February this year = support.
Let's see what happens:
RISK is always 3 ATR's and with ATR rising after today's action, position sizes need to be smaller.
Let's say you have a $100,000 account and you want to risk 1% in Tesla
. You have to be able to lose $1000 if TSLA
drops by 3 ATR's from your entry. So, you figure risk is 8 points average true range
(my guess of ATR) times 3 = 24 points to your stop loss. 24 points into $1000 = 45 shares. Keep in mind that 45 shares of Tesla
is $8000 or 8% of your capital, but that is what you need to get a 1% risk position on.