Tesla (TSLA) is up big today. Here’s your trade for tomorrow. (June 06, 2018)
TSLA RCM
We are looking at Tesla ( NASDAQ: TSLA ) here. Elon Musk is still CEO and President of Tesla ( NASDAQ: TSLA ); investors obviously like that. Frankly, when you think about it, I don’t know who could do a better job at what he is doing. I am not a fan but nobody cares; you shouldn’t care. The market likes it, that’s all we care about. I made good money on Tesla ( NASDAQ: TSLA ); I actually have a bull put spread on this stock.
Here is really the trade: He said that he doesn’t think they are going to need to raise cash in the debt market or by issuing stock because their Model 3 is going to be hitting 5,000 a week pretty soon, etcetera, etcetera and that is great.
So what do we do with the stock? First of all, it is really, really problematic to short the stock, always. You can make money on it on occasion, this is great if you are really committed but short interest is pretty high. You have several days to cover, this is a day traders dream here. If there is some kind of good news that sparks buying this thing can move up really fast and that is what has happened here. We are looking at this 200-day moving average now and this is obvious resistance.
So here is the thing: I don’t cheer for Tesla ( NASDAQ: TSLA ) stock any more than I cheer for any other stock, I am certainly not going to start now. If this stock happens to trade above the 200-day moving average tomorrow you are probably going to see this come back to test 350.00, for no reason other than that is what this stock does. If we look at the weekly chart we can kind of start drawing some boxes here pretty easily and see that this is really the range, right here.
I would not want to be short Tesla ( NASDAQ: TSLA ). If you are an option trader selling puts against it, even selling the 280.00 puts should work; they should work just fine. I would be careful about buying the stock unless it breaks above the 200-day moving average. If it doesn’t break above the 200-day moving average you do not want to own this stock, because it is not above the 200-day moving average; which tells you that is where the sellers are. It is kind of like this stock has made its move and you would be initiating a new trade. If the stock ran above here and you kept a stop right down here, that would really kind of be your safety trade with Tesla ( NASDAQ: TSLA ).
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