Thinking about buying or selling Tesla (TSLA)? Check this video first. (April 05, 2018)
TSLA
Let’s look at Tesla ( NASDAQ: TSLA ) and here’s why: This here is the pivot point, this line right here 275.70, we will just call it 275.00. Even though it kind of doesn’t look like it here this is actually the mid-point of yesterday’s range; it is just a calculation that the software does.
What we do is, we look at where the pivot point is and then on the following day, which is today, we decide whether this thing is going to be bought or sold. It gaps up just a little bit today and actually ran through our one, which is 300.00. I love it when these pivot points, the first resistance level, are also at even obvious numbers like 300.00 because it kind of gives you an extra sense of strength. It is not only a pivot point, these are calculations that floor traders have used and now that there are no floor traders they’re just on machines. Anyway, it gives you a sense of how strong buying is.
Here, Tesla ( NASDAQ: TSLA ) came up. Ran up to 300.00 and stayed there for quite a while, basically through the noon hour and then started trading higher still. Now, this is the kind of stock, if we look at it on a 15-minute chart, that once it gets going during the day, and I am talking specifically on uptrends; once it gets going during the day it really goes and it keeps going. You don’t typically see the stock, and I am talking to you day traders or you active traders, you don’t typically see the stock move up in the morning and then reverse and actually close lower.
Typically, once it gets going it stays in motion. Now you will get here, yesterday a little hiccup, noon hour, same thing here. Even here the stock gapped up right away and then started trading down. But ultimately when it got its legs it even rallied a bit to a new high intraday.
What I am saying is this: When you look at this stock you always have to wonder, “Am I going to buy the dip or am I going to sell it?” In this case, again, once the stock gets moving, if it starts trading above it’s opening price and it’s up there for the next 10 or 15 minutes or so until say 9:45, you want to stay long the stock. So what is our takeaway now? There is no real news, at least that I could see, on the stock. There is the whole Model 3, how many are they going to do and this and that? Well, none of that is really news.
I think what has happened here is that traders leaned on this too much to the short side. Members I mentioned this yesterday, once a heavily shorted stock that is so extended, once it starts moving the other way two things happen: The shorts start to cover; they start to scramble. And then that activity attracts momentum traders, traders that aren’t short, they’re just looking for something to do. So they see this and of course, everybody either loves or hates Tesla ( NASDAQ: TSLA ); me, I just want to make money on it. So they start coming for this stock and just like it went further down than a lot of people have expected it to go, once it did start moving up, now it ultimately goes, what I would say is, up further than people expect it to.
So is this a buy right now? Sure; if you want to buy it go ahead and do that. I am not going to pick a direction here. I will just say that it is a really high-risk trade at this point because the stock has already moved from 250.00 all the way up to $300.00; that is a 20 percent move. Now you are right up against this resistance box, this “Helga’s house of pain” right here. Where all these folks who were buying this stock, expecting it to take off like one of Elon Musk’s rockets, they’re underwater. I think you are going to see a lot of selling pressure come into this stock.
So if I were you, if I was long this stock, I would be keeping my stops fairly tight and stay very close to the exits. Because if this stock starts to stall out, I am not saying that it is going to reverse again to the downside, I think that train has already left the station; I don’t see it just diving again. But if this stock starts to peter out, think about it, what is your reason for holding on to it? You bought it over the last couple of days. You made really good money on it. Now don’t just sit there and relive your glory days. Go ahead and take your profits and if you think it is going to move up a little more you don’t have to take them all off the table just sell some of it. Keep some of your position just in case Tesla ( NASDAQ: TSLA ) continues to move higher.
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