Although I personally am a big fan of Tesla and the cars, this analysis is not about my love of the cars but rather the balance sheet and technical analysis. It is no secret that Tesla (TSLA) is the most shorted stock in the United States right now. The balance sheet and cash flow make no sense (burning through billions of dollars in capital each quarter, constant net losses and never made a net profit for the last 10 years, and yet the stock price keeps going up). Despite all this, Elon and his magic make people believe (can anyone say "behavioral finance"?)
However, if you look at the Elliot Wave macro outlook, it looks like TSLA is approaching wave 5 (which would mark the top, then a ABCD correction would follow) - and if the waves tell us anything, the "top" wave 5 would appear to be around $420 - the exact price Elon tweeted he would take his company private at today.
This is not a recommendation to short TSLA stock - everyone who has done that for the last 10 years has lost money. Rather, it is an observation that $420 may indeed be the market top for TSLA, even if they do end up being a solid car company for many years to come.
However, if you look at the Elliot Wave macro outlook, it looks like TSLA is approaching wave 5 (which would mark the top, then a ABCD correction would follow) - and if the waves tell us anything, the "top" wave 5 would appear to be around $420 - the exact price Elon tweeted he would take his company private at today.
This is not a recommendation to short TSLA stock - everyone who has done that for the last 10 years has lost money. Rather, it is an observation that $420 may indeed be the market top for TSLA, even if they do end up being a solid car company for many years to come.
Comment:
Trade ended up being correct, but for different reasons (SEC probe, Elon's erratic behavior, etc...)