Massive beat on earnings? This is what I’m suggesting you do with Tesla ($TSLA) (July 23, 2020)


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I want to look at Tesla ( NASDAQ: TSLA ) real quick today. The company reported earnings that kind of blew everything away; way more than expected, it was really good. The stock was up, I think, almost $100.00 after hours. And then today it opened up as well I think to a new high, it opened up kind of above this range. But then virtually immediately started selling.

If you are a “Teslonian” then absolutely buy more; Lord almighty, what a blessing to be able to get this stock for under $1500.00 a share. This is your opportunity, go for it and pile in because next stop, $5000.00, so I support you in that trade.

Now, if you are just a technician and just looking at charts, this is a stock that is really, really dangerous right now. I get all the buying pressure, I get the fact that at any time it may be added to the S&P 500 ( INDEXSP: .INX ). That includes tomorrow or 6 months from tomorrow or never. And so if you are holding because you are counting on that, this is what you have got to understand, everybody knows it. You don’t have an edge because you are holding the stock under the knowledge that sooner or later the S&P 500 ( INDEXSP: .INX ), Standard and Poor’s, is going to add this to the S&P 500 ( INDEXSP: .INX ). Everybody knows this already and so there is no edge in buying it and waiting for that catalyst.

Today what has happened gives you another example of that. I mentioned in the forum yesterday that I think there is like a 99 percent chance that Tesla ( NASDAQ: TSLA ) is going to report good numbers and the stock is going to pop. That’s because they had to in order to qualify for S&P ( INDEXSP: .INX ) inclusion. You can always massage numbers one way or another to do that. But the question is, is the stock overdone? You look at the weekly chart and this is nosebleed x12 but it’s Tesla ( NASDAQ: TSLA ) and this is what happens with this stock. A lot of people that are a heck of a lot smarter than me have gotten killed trying to pick the top here, so this is something that you don’t want to do.

All I am saying is, if you have been running with this stock all the way up, this is your opportunity to sell. At least take some profits. You don’t have to take it all, I would, I would be out of this thing. But you don’t have to take it all but at least take some; because as I look at this chart I could see this stock pulling back 400 or 500 points and there would still be nothing wrong with the uptrend.

That’s what I am trying to tell you, the risk of a downside move that is just kind of normal is really, really big. And so I would say now is the time to take profits. But like I said, if you are a musketeer if you are a “Teslonian” and you just think that this is going to be the stock for the ages then now is your opportunity to load up. You can buy all the shares from people that are listening to me and deciding to sell; so we could have a really nice exchange here.

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