Here’s what needs to happen before you sell Tesla ($TSLA). (February 04, 2020)TSLA
Tesla ( NASDAQ: TSLA ); this stock has gone parabolic. You can see where yesterday this thing broke through the upper trendline and just kept going. Here, on 3 standard deviations, which a stock virtually never breaks through, this stock is up above. It has closed above 3 standard deviations and that means that this stock is really getting tired. It is one thing to break out above 3 standard deviations when you are coming from a squeeze. Frankly, that type of move is just about a buy signal when a stock, again, comes out of a squeeze and blasts up so far that it runs above 3 standard deviations from the 20-day moving average, that’s a buy signal.
This here, look, I am not going to tell you it’s a sell signal; there are a lot of really, really smart guys on the street and a lot of them are shorting Tesla ( NASDAQ: TSLA ). Go ask them how smart they’re feeling right now and depending on how much they are underwater they will tell you, “Not very smart at all,” or they will be lying to you.
This stock does look close to peaking but I am just not quite sure it’s there yet. Here’s how you can tell though: This was the last time, on the 27th, not yesterday but a week ago, was the last time that this stock printed a lower high and a lower low for that matter. Ever since that time, every single day, even the little small days, every single day has given us a higher low and a higher high all the way up here.
What I am looking for, I am going to be looking to see how this stock trades tomorrow. This is the box right here, this encompasses the trading range of the stock today. If this stock closes lower, if it closes within the box, that to me is a pretty good sign that it is time to be taking profits. I just can’t recommend shorting the stock, it has just been absolutely brutal and you can’t get a borrow. You can buy puts or sell calls on it but it is very, very difficult and costly to find stock to borrow to short and you can see why. For one thing, it is already heavily shorted. (2) You have got to be an idiot, a suicidal idiot to want to do that.
There were a couple of short calls out there today, Citron Research, Andrew Left who had said he would never short Tesla ( NASDAQ: TSLA ) again came out and said, “Look, I even think Elon Musk would short it here.” I am not sure that that’s a good litmus test for what’s right to do but whatever, he’s short I’m not.
So what I would do, again, is watch this deal tomorrow. If the stock closes below 969.00 then I think you want to be really careful and I would be taking profits into this. If it closes above that, you could look and say $1000.00 would be the top but for crying out loud we could have said 800.00 a few days ago; that really didn’t work. We could have said 650.00, that was the top here. How about 600.00? That was the top back here.
This thing is like the Energizer Bunny, literally with a lithium battery, so that is what I would look for. You have got to stay below 968.99, 969.00, make it 970.00. If it closes below 970.00 then you are probably going to see more of a cascade of selling as people do go to take profits. That’s how I would trade Tesla ( NASDAQ: TSLA ).