Here’s an update on $DKNG and $TSLA. (November 27, 2020)
DKNG TSLA
I just want to talk about the last couple of trades I put out as a Free Chart. DraftKings ( NASDAQ: DKNG ); I talked about this last week, about how to sell out of this for a really, really strong profit and then just wait for the reset. We got the reset last week. You could look at it and say there are a few things wrong with it here and there but the nice thing was we could set a stop at a pretty tight level, like right under there, right underneath this 46.61 level, which defines our risk.
Today the stock made me look like a champ because it broke out and now it’s holding this breakout; we don’t know if it will hold or not but that’s the trade. So you are in the trade now; frankly it’s a little early to raise your stop. You can still keep your stop under there, you have to give the stock some room to pull back and it might. Even if it pulls back below 50.00 you have to be willing to hold through that kind of stuff. We really need more than 4 or 5 percent gain on a stock; we are in this for more of a profound move like up to $60.00.
Speaking of profound moves, we’ve got Tesla ( NASDAQ: TSLA ). I first started talking about this one, it might have even been back here but I don’t know, I’m not trying to take credit I am trying to take profits. The stock gaps up, pulls back, and then has a continuation pattern. So we are in this stock, I think it was 462.00, as I recall. This was the high here and so I had said, “Hey, if the stock jumps above 462.00, that is when the next entry point is.” And kind of the goal, the profit target was 600.00.
I remember saying that’s actually kind of a minimum price target when you look at the weekly chart, it just really looked like there is no way it’s not going to hit 600.00. Beyond that, the nice thing is we don’t have to predict 620.00, 650.00, 700.00, 800.00, 1,000.00, 1,000,000.00, we don’t have to predict that until it pushes through 600.00, and so far it hasn’t been able to do that.
I took profits today and I suggested members do. Depending on your time frame you can certainly keep some stock; you can keep all of it, you’re not managing my money and I’m not managing yours so keep as much as you want. But my suggestion would be, if you decide, well, I just want to hold this stock for a bigger move, again, depending on what your time frame is, I think there is a lot of merit in saying, you know what? I am going to hang onto the stock unless it falls back below $500.00.
Obviously, that’s a stop that requires you to be willing to hold through a 15 or 20 percent pullback and be of a mind that the stock is just going to continue to go higher. As you know, Tesla ( NASDAQ: TSLA ) is being added to the S&P 500 ( INDEXSP: .INX ) on the morning of December 21st so that is going to give us a lot of buying pressure.
Maybe I was premature in taking profits at 600.00 but that has kind of been the trade for me. It doesn’t mean that I won’t watch it. It doesn’t mean I wouldn’t be back in it if it did break out above 600.00. This was a really good volatility squeeze and at some point, especially when it happens really fast, at some point you want to be booking profits just so if anything you roll back into it you’ve already got a really nice capital gain on the stock that you can kind of use to offset your risk; at least that’s the way I see it.
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