Bullish analyst — bearish note. Go figure. Is this a buying opp for Tesla (TSLA). $250 will give you the answer. (September 15, 2014)
Let’s look at Tesla ( NASDAQ:TSLA ). An analyst for Morgan Stanley downgraded this stock today, essentially saying it got ahead of it’s self; it’s gone too far too fast. Elon Musk said essentially the same thing last week. What was interesting to me was this, analyst that says it’s gone too far too fast; he’s got a 320.00 price target on it so he’s still expecting this stock to go higher. You know what I think of analysts, most of them don’t really know what they’re doing with respect to stocks, but they sure are “hell on wheels” when it comes to looking at businesses and that’s what that’s for. But the way a stock trades is different, most of those guys working for the big firms, they wouldn’t be working for the firms if they could trade stocks, so instead they talk about them and that’s fine, it works to our advantage.
Here’s the thing, you’ve got the 50-day moving average moving up here, 320.00 is probably right around here, so I guess the whole “too far too fast” thing means that he just thought this wouldn’t be good if the stock did this, Instead, probably plenty of clients, that for what ever reason, were just kind of told or suggested last week by their Morgan Stanley broker, that they might want to be getting out of this stock a little bit, let’s go ahead and take profits. Magically the research note comes out; the stock trades down on massive volume right at the 50-day moving average.
Now by the way are you sitting there with your shocked face, “Dan, they wouldn’t do that?” Dude, it’s Wall Street; it only happens on weekdays or weekends, those are the only two times that preferred clients get advanced notice about things. I’m not saying it did happen but I’m definitely saying that but you can’t say definitely say that it didn’t. The point is it’s just a little bit interesting to me when somebody who’s bullish on this stock, with a 320.00 price target, downgrades it saying it’s going too far too fast, I don’t understand that, I would think the earlier the stock hits your price target the smarter you look, but that would be me.
Here’s my point on this, my point is, don’t be either bull or bear here on Tesla ( NASDAQ:TSLA ). Instead, be objective, we’ve got a 50-day moving average here that’s been support, this could be a gift, the stock went from above the upper Bollinger Band right here to very close to the lower Bollinger Band down here, and it’s right at this 50-day moving average right here, we’ll call support down at 250.00. If this stock starts trading higher tomorrow this could turn out to be a really good buying opportunity; remember, the guy that knocked this stock down at about 12 percent one point during the day, but the guy that knocked the stock down 10 percent is also bullish on this too, so it’s kind of like if you liked it here you’ve got to love it down here.
My bet is, my anticipation is that you’ll see some buying tomorrow and if you do why don’t you join those buyers but then just have a stop, have a tight stop a little bit below 250.00, I mean pretty close. Another thing, I’ve seen this happen several times and you just need to be aware of it, you could see this stock gap down tomorrow. If it gaps down don’t assume that that is not a buying opportunity.
A lot of times you’ll see these stocks close down like this, there’s a lot of people that actually do have regular jobs and they’re not looking at the market all day. I know to you and me that sounds really strange but some people don’t look at the market all day, they come home tonight and they say, “Oh my gosh, Tesla’s ( NASDAQ:TSLA ) down 10 percent, I’ve got to sell.” They put in market sell orders in the morning and that supply crushes the stock and it doesn’t open at the same level it opens lower.
If that’s the case don’t just buy it, but if the stock, after it gaps, starts moving up then definitely buy it, definitely buy it. The idea is you want to be buying as low as you can and then have a stop as high as you can put it so you’re actually risking the least amount of money. I think Tesla’s ( NASDAQ:TSLA ) a buying opportunity here, as long as 250.00 holds, I’ve got to put that in there, as long as 250.00 holds, then I think this is your “huckleberry” right here.
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