$17 down for Tesla (TSLA). I’m looking for $280 as the next level of support. Here’s my take. (April 12, 2017)
Today I want to look at Tesla ( NASDAQ:TSLA ). The valuations are silly, but we don’t make money on valuations. Seriously, we make money on the price action, so we won’t talk about that. The only thing that I say about valuations, with respect to Tesla ( NASDAQ:TSLA ), is this: If you are managing a lot of money, if you are a fund or an organization who has enough money such that owning a stock, buying a stock or selling a stock will actually move that stock, if you are one of those guys; and I am not talking over night. I am talking about somebody who says, “I want to take a position in such and such a company, because I think the company, the growth is going to be strong, and we are investing in the company.” That is what big funds do, they just don’t trade off of stochastics. If you are that guy fundamentals are going to matter to you.
Or in Tesla’s ( NASDAQ:TSLA ) case you don’t give a rip about fundamentals because you think Elon Musk is the next best thing since sliced bread, which may not be a bad comparison given how healthy bread is made out to be but it is actually kind of bad for you. The point is, you may believe in Elon Musk’s, save the earth, his tactic for making batteries, and flying to the moon, and all that kind of crap. Fine! I drive a Tesla, it is a wonderful car, I’m short the stock. The point is, if you are a big fund manager and you are long Tesla ( NASDAQ:TSLA ), the fundamentals, seriously, don’t matter to you. And that is okay, because this stock recently hit an all-time high, which means that unless you bought recently you are making money, it’s all good. Fine.
What I am saying here is, that if fundamentals start to matter, maybe it is a lowered guidance. Never happen with Elon Musk, the future is so bright Tesla ( NASDAQ:TSLA ) is going into solar powered welding goggles for everybody to wear. That’s fine. But if suddenly the crowd turns and decides that fundamentals matter and it is time to liquidate, again, our winning position in Tesla ( NASDAQ:TSLA ), everybody is a winner except those that bought over the last couple weeks. If the market decides to start liquidating that position Tesla ( NASDAQ:TSLA ) can easily fall down to the 50-day moving average, that is another 10 percent. It can easily do that.
Would it fall further than that? Honestly, I am not the guy to say. And just because I am short Tesla ( NASDAQ:TSLA ) doesn’t mean anything, I am not going to be talking my book. But I do look at this, and if Tesla ( NASDAQ:TSLA ) falls down to 280.00 I am covering. I probably won’t be around for 270.00. I am looking for 280.00 and it is strictly on the foundation of what I just told you, technicals that nobody cares about. But if they start caring about them, they are going to be liquidating the stock. And the fact that over the last days, this stock has reversed and volume is starting to be a little bit heavier than average.
So I think you want to be careful about Tesla ( NASDAQ:TSLA ). I don’t look at this as a buying opportunity. If the stock comes back to 280.00, perhaps 270.00, I wouldn’t even look down here unless earnings are a disaster; but if this falls back to 280.00 and certainly 270.00, THEN you ‘Teslonians’ can look at that as a buying opportunity. Because since this rallied above the 50-day moving average back here, the only time it has been back are three different occasions, and those have been the last really good buying opportunities. There is your buy zone, right there. That is what I would be doing on Tesla ( NASDAQ:TSLA ). Again, if you are buying here at 280.00, you are competing with me for shares, because that is when I will be covering.