Thinking about buying Tesla (TSLA)? Here’s your trade. (August 11, 2017)
Lets look at Tesla ( NASDAQ:TSLA ) today. This is not going to take too long, we don’t have to look at it fundamentally, we just have to look at it technically. Here is the thing: The stock is in an uptrend. So far it has printed a lower high, right? That is a bearish thing. It has got these two lows here at 310.00, so this stock could easily fall down to 270.00, to the 200-day moving average. Right! That is just not what Tesla ( NASDAQ:TSLA ) does.
Here is what I would do, and it is actually pretty simple: We have got some big institutional buying here, a big gap on volume, didn’t come back. Gapped up on volume and then the next day lower volume but the stock just continued to move. So now this stock has been trading below average volume, if we are just looking at volume over the last 20 days; I would not buy Tesla ( NASDAQ:TSLA ) here because it is still in consolidation. You can’t even really look at the 50-day moving average and say, “Oh, it is holding above the 50-day moving average.” Hey! It didn’t do it here. It has actually acted as resistance, then it finally gapped up above it, so the 50-day moving average is essentially meaningless.
If you are long the stock, I don’t know, maybe keep a stop under here. Frankly, it is hard to protect your position, with stops, on Tesla ( NASDAQ:TSLA ) because it can be so volatile and kind of unpredictable. I think your best way to protect your capital on Tesla ( NASDAQ:TSLA ) is to trade in a smaller position. My next entry on this would be a breakout, say, above 370.00. I wouldn’t buy it here anticipating a breakout, because this might be sitting here for a while. If the stock starts breaking out above 370.00 (I will just go ahead and put in an alert here for me, and only me, and we will do that for a month), if it starts breaking out above 370.00 I just don’t think it is going to be any time at all before it starts hitting new highs here.
That is your trade on Tesla ( NASDAQ:TSLA ). Very, very technical. Wait for it to breakout above 370.00 and that is when you make your next buy. As I have said many times before and I will say it again, DO NOT SHORT Tesla ( NASDAQ:TSLA ), it is not a good trade for you, that is not where you want to be.