The Tesla ($TSLA) Trade…Part Deux.. (November 17, 2020)


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Yesterday in my little Free Chart Video I talked about Tesla ( NASDAQ: TSLA ) and how to trade that stock. My thesis was, until and unless the stock breaks above 460.00, actually 462.00 yesterday, this was a stock that you really didn’t want any part of, as a trader. If you want to accumulate the stock, fine, as it goes lower you like it more. But as a trader, you wanted to stay out of it as long as it was still in this box.

The idea is on December 21st Tesla ( NASDAQ: TSLA ) is being added to the S&P 500 ( INDEXSP: .INX ). So between now and then a lot of folks have to buy this stock for their tracking funds, right? And so there is kind of like built-in buying. My thesis was until it breaks out above yesterday’s high there is no reason to get it. But once it does break out, get in.

And so today we saw that move here, and if you just look at it on the 15-minute chart right off the bat today it runs up and then it doesn’t do anything for at least an hour into the day. I had an alert set just at 460.00 and then as soon as that alert pinged I went, okay, I’m in, and I bought the stock. And then here I am, I still actually bought some calls on it as well, just some December calls to hang onto.

I am not trading this for a one-day move though. That is what I want to get into your head; I am not trading it for a one-day move. You can see how the stock has gone up so much but by the way, this is trading, if this thing clears 500.00 it is pretty easy to envision another 100-point move. That is not a prediction; all these knuckleheads give you, my price target is this. Well, sure, whatever; nobody knows for sure.

But the way the chart is looking, the way the stock is going, you kind of have to look at it and say, okay, if this thing gets back above 500.00 then really truly nobody is ahead of me. There is nobody that I am going to run into that wants to sell their shares. That means that everybody who owns the stock is a winner. And we like winners; we’re all running together.

So I would suggest if you are long the stock just hang onto it. Take a little profit if you are skittish if that is what your deal is. But I think you definitely want to hang onto this stock. One of the mistakes that a trader can make is they sell really, really good solid stocks too soon. We have all heard the story, sell too soon. But you can sell really too soon and I think this is one of those that if you give it a little bit more leash it’s going to run really well for you.

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