Use this simple trendline to stay long Tesla (TSLA) (January 06, 2017)TSLA
Once again we are going back to Tesla ( NASDAQ:TSLA ). I have covered this a couple of times in this Free Chart video format and so I just want to continue this trade. This was a stock that I wasn’t really particularly interested in for a lot of different reasons, none of which are relevant to this video. There are just other stocks that were more compelling to be trading, and other companies more compelling to be investing in. But, you see this uptrend, we have looked at this for quite a while. And then when THIS happened, that to me is a sign that this entire little mess here was not really a top, it wasn’t really hitting this resistance area here; but rather it was just kind of a little consolidation phase. So once you see this, if you are looking at it intraday, you would see this happen and you are buying this stock, I already had this trendline here, and then you just keep a tight stop here, just in case the stock reverses. It didn’t do that, so it traded up nicely during this day.
And so then what happens? The next day a little breather. Not surprising after the kind of move that it had here; that was Thursday and that took us to Friday. So now we have got another move up. Now, one percent, when you are looking at other stocks that are working really, really well Thursday and Friday, that is not a big deal. But with Tesla ( NASDAQ:TSLA ) this stock can move. You can see from the low here, it is up 25 percent since the 1st of December. This is just one to these wild stocks. It is a little bit like Amazon (and no, that is not blasphemy), it is a little bit like Amazon ( NASDAQ:AMZN ) because it is like fundamentals don’t matter. So it doesn’t matter whether the stock is cheaper, it is never cheap, it is just varying degrees of expensive.
If you are a ‘Teslonian’, if you are somebody who really, really likes the stock, who likes to trade the stock, you think the company is awesome, and this and that. Fine, use this as your reference here, use this trendline. If the stock trades below this trendline, that is about a 6 percent loss when you are buying right here. You can use that; it is the effective trendline. If on Monday or Tuesday we get a little bit of a pullback use that as an opportunity to buy a little bit closer to this trendline. And then as the stock goes on, the trendline line moves higher, you can ride this puppy all the way into February, as long as that trendline holds.