Here’s an update on the Tesla ($TSLA) trade…and some thoughts on the next move Alphabet ($GOOGL) is likely to make. (August 18, 2020)
TSLA GOOGL
I am going to look at Tesla ( NASDAQ: TSLA ) real quick here and then I want to look at Google ( NASDAQ: GOOGL ) as well. I mentioned last week that Tesla ( NASDAQ: TSLA ) was a stock that had been squeezing. This is just a great squeeze; I love this kind of thing. The stock had been squeezing, it’s pretty close to the 50-day moving average and that’s a great setup that I look for. And then if the stock breaks above resistance, which you could see here, here, here, here, here, resistance, and even here last week. You can see that the stock was being sold.
So the idea is to be buying the stock just as it crosses the point of least resistance, meaning 1700.00. So you are buying here, boom, 1700.00 and then the stock is off to the races. I had said that it seems to me like the stock can easily get to 2000.00, which isn’t a huge percentage move, 18 percent. Shoot, I’m looking for more from Google ( NASDAQ: GOOGL ) than that, but I will take it.
If you look at the weekly chart, first of all, we will look at the comparison with the SPY ( NYSEARCA: SPY ), in other words, the relative strength. So if the red line is moving up that means that the stock is stronger than the S&P 500 ( INDEXSP: .INX ). You can see this is moving to an all-time high really. And so the way Tesla ( NASDAQ: TSLA ) is trading this is a stock that wants to go much higher.
You can look at the weekly chart and see kind of the same thing. The stock is really close to splitting here, I think it’s at the end of this month. But the way the stock is breaking out here I can see this blasting right through 2000.00 and just continuing to go. So the last really good entry was at 1700.00, if you are buying now that’s fine. Hopefully, it’s because you are building a position that you started lower. With this split coming on I think Tesla ( NASDAQ: TSLA ) is in prime position to continue to run, I have talked about that before.
And then I want to look at Google ( NASDAQ: GOOGL ) because this stock had a little bit of a different configuration but it broke out really well today as well. We put an option position on this on Option Market Mentor, sold a bull put spread; because I didn’t know this has had a little bit of a steep fall but I didn’t really know how much this stock would rally if it would rally a lot. But I at least felt like the stock wasn’t going to fall below support here. So we sold some out of the money puts, I think it was the 1440.00 and then bought the 1400.00 put.
But this is a stock that really does look like it’s running higher, kind of like the rest of the FANG stocks. So I don’t really think the government, all those herrings, and everything, you have to just laugh because I will tell you I can’t think of a more pathetic room than a room full of politicians where the IQ acts of the collective IQ actually decreases the more of them that pack the room. So that whole thing is not going to amount to anything, I promise you that.
I look at Google ( NASDAQ: GOOGL ) and I can see this thing hitting 1600.00. So that would be my trade for now; look for Google ( NASDAQ: GOOGL ) to move at least another 50 points or so.
Free Chart