I’m not betting against Tesla ($TSLA)….but I am betting against this chart. (October 28, 2019)
TSLA
Let’s look at Tesla ( NASDAQ: TSLA ). I go into a lot more detail on this in tonight’s Strategy Session. I think you have got to sell Tesla ( NASDAQ: TSLA ). This stock has had two huge massive volume days and I think a lot of this has been short covering but it also has been a lot of natural buyers, momentum guys that are eager to buy Tesla ( NASDAQ: TSLA ); the stock has made one heck of a run.
Day 3 was today; the big money is going to buy on the first day, that’s what makes this big move. The second day, the kind of semi-fast money buys and pushes the stock up to new highs. Then the third day, this is the not so smart money buying today. I’ll tell you at the risk of offending you if you bought Tesla ( NASDAQ: TSLA ) today you’re not so smart. Sorry, but it’s true and the price will PROBABLY, but we don’t know, the price will probably prove me correct. But even if it doesn’t and the stock is up at 360.00 tomorrow I will still stick by my, shall we say, my suggestion that it’s not so smart to buy Tesla ( NASDAQ: TSLA ) on this day.
The reason is because of the risk. Nobody knows, and if it seemed like I was saying “I know” that Tesla ( NASDAQ: TSLA ) was going down tomorrow, which actually I guess that was kind of what I was saying, I don’t. I don’t. We could come in tomorrow and see Tesla ( NASDAQ: TSLA ) gap up to 340.00 and run to 400.00, I don’t know. And the fact that I don’t know actually defines my opinion on the stock. This stock is up SO much, it is up so much, 28 percent in just three trading days. That makes it a very, very risky stock to own because of the volatility. We could easily see this stock come down to earth tomorrow.
My suggestion is this: I have a bearish position on it but it’s not what you might think. I would never short Tesla ( NASDAQ: TSLA ). I think that’s a fool’s errand and you might as well wear a suicide vest and go look for a dead end cave. But here we’ve got 360.00, that is where I sold some calls. I sold some calls at 360.00 and then bought the 380.00. And so my bet is not that Tesla ( NASDAQ: TSLA ) does this. My bet is, that I just don’t think Tesla ( NASDAQ: TSLA ) does that. That’s my bet. That’s how sure I am that Tesla ( NASDAQ: TSLA ) is going to reverse; meaning, I am not really sure, I am just playing the odds. This is a risky trade to be long. I wouldn’t be long. Today’s low was 322.60, if that stock falls below here, which is just $5.00, $5.11, then this stock can retrace significantly, so you want to get out of there.
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