A look at Tesla Motors Inc. — a Bear Killer or Bull Spit?
Tesla Motors Inc. ($TSLA) averages are at $99.57 (21 day SMA), $78.22 (50 day SMA), $44.92 (200 day SMA). Over the past 52 weeks TSLA has traded from a low of $25.52 to a high of $114.90. TSLA was last at $101.61 on a volume of 6,505,120. Average daily volume has been at 10,352,244.Tesla (TSLA) has been defying gravity for nearly 2 months. Back in early April the stock gapped out of consolidation when the company issued positive guidance and indicated that it expected to report a profit for the first quarter of 2013. This followed news that they had better than expected sales on the Model S vehicle.
Since that move, the stock has run another 140%. But it has been consolidating. Take a look.
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The daily chart shows that the stock is consolidating nicely — and as each day goes by, the 50-day moving average climbs higher and higher. AT some point, the stock could test the 50-day moving average. If it’s established that the 50-day moving average serves as support, this is a stock you want to buy.
Now, I know the stock is super expensive — it is trading at nosebleed valuations. You don’t have to be a fundamental analyst to see that. However, short interest remains very high — 30% of the current float. The consequence of such high short interest is that an expensive stock could get even more expensive in a big hurry. If the stock starts running into earnings, which are due to be released on July 22nd, we could see a short squeeze that makes $100 look like a great buying opportunity.
For now, I view TSLA as too extended to buy confidently. However, if the stock closes above $107, that will surely scare the shorts and we could see a real pop on this stock.
So set your price alerts for $107. If your alert gets triggered, then check out the stock. If it’s running on high volume, then pounce on the shorts and make ’em compete with you for stock. While they are losing, you’ll be winning.
Tesla Motors,Inc., designs, develops, manufactures and sells high-performance fully electric vehicles and advanced electric vehicle powertrain components.
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