What’s the new price target for Tesla (TSLA)? It’s not a number, it’s a planet or a dwarf star, depending on how bullish you are. (July 06, 2020)
TSLA
Let’s look at Tesla (NASDAQ: TSLA ). I started covering this stock last week in the Chart of the Day. I mentioned over the weekend that this was actually my biggest position, not because I kept buying it all the way up, though I was a little bit aggressive in that, but it was really just because of price appreciation, the stock just kept going up.
You might have looked at this here, it wouldn’t have been a bad look, you might have looked at this here as a potential blow off here; where the stock went up so much, and then it closed below where it opened on Friday that, that was the end of the road. But to be honest with you, I haven’t seen any blow offs that start with this type of a pattern; this is kind of a hammer pattern; where you get the close that is below the open, so the stock opens up here, it closes there. And then other than that open and close you are getting a move down here intraday.
What this really signifies is, okay the stock opens up here and then runs down, which is not a good thing, and then it runs back up well off of the low. It doesn’t eclipse the open but it does close near the high of the range. That’s what we saw here plus it’s Tesla (NASDAQ: TSLA ) and so there is always a lot of scrambling for this. And so you stay long and then today the stock opens up again higher and continues to go. I closed out my entire position today a couple of different times because I saw the stock keep going higher. We can look at this on a VWAP pivot point deal, this was the pivot point; the top pivot point was 1271.00.
Well, this thing got above that at the open and then stayed above the third level of resistance and never REALLY looked back. There were a couple of times when I was thinking, that’s it for that, so I kept raising stops. Early on I kept raising stops, staggering them out and never really got stopped out. And then I got stopped out of one and then right around the noon hour, somewhere in here. I have been guilty in the past of trying to time tops, of trying to absolutely pick the top, but I need to not do that because, frankly, if the stock whipsaws and I wind up losing a lot of my profits, even though I know I will still make money, I will feel like an idiot. And that stuff is really important. Your mental psyche is a huge part of trading.
You can have a really profitable trade but if you know that you traded it wrong you are going to wind up feeling like a dope. So I got out of it but I set a couple of alerts, one of them went here, somebody in the forum, I apologize, I forget who it was, mentioned this breakout here from an intraday volatility squeeze just shortly after I bought the stock; I think it was like here or something like that. And so then the stock is up and then once again I sold my last part at 1372.00, very close to the close. I felt really, really good about that.
Well, now the stock just continues to go higher after market. So this is what I have done, I’ll admit it I took another position in this stock after hours. It was small enough though, to where, frankly, the stock could go to zero and my trades on this stock would still be okay because I made that much money. And so in hindsight what I would do is, rather than close the entire position I would just say, “You know what? This is really good; I am going to close 90 percent of it.” Or, “I would close more than 50 but I am just going to close a fraction of my position and just hang onto the rest of the stock.”
Because in a way, me selling all of my position, again, not at one time but over time, a series of staggered sells, my selling the entire position was actually me kind of calling a top and being wrong, because then I would get back in. I’m doing it with good risk management, with respect to position sizes, entries, where my stops are, stuff like that. But generally speaking, doesn’t it seem like a better way to be trading this trend? You almost expect this stock to go back in time; it’s freakish how this stock has run. So in hindsight, that’s the way I would have been trading it; just decide how many shares I am going to hang on to that are just in the vault, I’m not going to get rid of them until maybe it hits 1500.00.
I had suggested earlier this morning that the stock might hit 1400.00 this week and I was correct. But this week turned out to be about 4 hours. Anyway, I would stay long Tesla (NASDAQ: TSLA ) until this stock forms a red candle. Once the stock closes below the prior close, that’s probably a good indication that this run is over. But until that time I think there is a real frantic competition to buy this stock by different factions.
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