I am buying puts on TSLA again. The monthly chart shows a lower open, with support in 360-390 range. On the weekly chart, stochastic is below RSI and price is below 20sma. It looks like last week was the restest of 50-line, and now RSI is turning lower. Yesterday TSLA closed above the resistance line and a close back below it today indicates more selling to come. CAUTION - stock may hold at 10SMA and move back up.
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TSLA opened just under the resistance line this morning, and it broke yesterday's low, which is a good sign that it will head lower. If you have weekly puts, you should take profits today. If you think Friday will see more selling and you want to hold, only hold overnight if you are willing to lose all that profit and capital.
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There was a sharp move up on 15min chart, back up to 20 SMA. It reversed and is heading lower, but due to the buying volume in that move up I am cautious and will start taking profits. Many traders will struggle to hold through the swing between profit and loss as option prices fluctuate with price action. This is why success is critically dependent on using less capital for riskier (more volatile) options, and on making good technical-based decisions. You will also note that IV has come down since morning so option values have decreased. My final target for selling puts is 455-457, based on hourly chart, but I will sell along the way or close sooner if technicals give me doubt in puts.
I was predicting the same thing and have some similar positions. Tomorrow is a big day.
nabeelsyed1
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@RALBWSB, ...... big day for what? tesla shares r going down more
CASH_OUT
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Which is the resistance line you mention in the end?
OptionsRising
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@CASH_OUT, The white line is resistance. I suggest on your daily chart, you draw your own resistance line and you can see how price stayed below it. You can draw lines that touch the highs and lows, or the closing prices. Usually I use highs and lows, but sometimes connecting the close is useful. Try it using a candle chart and a line chart for practice if you think you can improve in drawing trend lines and support/resistance lines.
abalodi90
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what strike/exp are u buying?
OptionsRising
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@abalodi90, I bought weekly 430 puts. TSLA options are expensive and risky, so I prefer to use little capital and buy weekly options. If stock moves up my real loss is very small. If stock heads towards 400 the option price will easily give me a high return.