Here’s my trade on $TSLA (March 23, 2022)
TSLA
I want to look at Tesla ( NASDAQ: TSLA ). We have had a heck of a run here in Option Market Mentor as well as Stock Market Mentor. We didn’t catch it all but we caught a really nice move.
My suggestion is, at this point, go ahead and close down at least some of your position. The stock is still printing a higher low, a higher high intraday. It is still really, really strong but today really gave us kind of a sea change in the way the stock is trading. This is a 5-minute chart, this was a nice little kind of a “cuppy” thing here and then another one, a nice move higher.
The first time in the morning it ran, and then it has fallen back below the volume-weighted average price. In fact, the volume-weighted average price, that’s this little orange line, this is the first time this has actually trended lower here. Now again, this is a 5-minute chart so we are kind of micro-scoping this.
As I look at the way this stock is trading, I have been long this for not that many days at all, but I had a fairly decent option size on it and so it’s been a really, really strong trade for me, I’m out of it. I was actually short it for a while today but it was a short-term trade after it had broken 1000.00. This is 1000.00 here, so you can see how short that was. It was very, very brief and it was with put options because on the stock side you are not going to make that much money.
Just buying puts that literally expire on Friday, you are not going to have to pay much for them, but you also need to be mindful that it has to be a short-term trade. If the stock doesn’t work for you then you have got to ditch it. I got what I expected, which was a very small profit. The point is, you can go long or short on this but right now I just think that it is risky to be either way, certainly, it’s risky to be short. I think Tesla ( NASDAQ: TSLA ) has killed a lot of bears. Frankly put, Tesla ( NASDAQ: TSLA ) bears are on the endangered species list, I think.
As I look at this right now, the path of least resistance is higher, that’s the way the stock is going. However, the path lower isn’t really as hard as it has been over the last several days, or I should just say today, over the last several time frames I’ve looked at. And so this is really not a sense of trying to time the turn. For me, it is really just a sense of trying to protect my profits so that if the stock does reverse, it doesn’t reverse with me hanging on to positions that I wished I had sold.
The bottom line for me is, if you are in a nice spot, you got a really good gain, and the stock starts looking tired, don’t sit there and hope for the stock to keep moving. Instead, you know what? Just take your profits and wait for the next one.
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