Looking for a defined risk, high profit potential trade? Try Tesla ($TSLA) (August 04, 2020)


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I want to look at Tesla ( NASDAQ: TSLA ) today, this is why: Because this thing is really starting to squeeze pretty significantly. The Bollinger Bands are still over 16 percent apart but this is Tesla ( NASDAQ: TSLA ). This thing has some pretty wild swings, pretty decent, horrendous volatility but that volatility has really been waning lately.

The current trading range is this here, that’s a pretty tight trading range. As opposed to like that, where it was just in June. This is a stock that has got a real low trading range, if we just move it here you can get a better sense right here. I am looking at this for a potential pop to the upside.

The only catalyst that I can see on this thing is the S&P 500 ( INDEXSP: .INX ) deciding that it is time to add Tesla ( NASDAQ: TSLA ) to it; and if they do add it that could come any day. We don’t know it could come today. For all we know they may be saying let’s wait and see another quarter; because we are getting tired of seeing all of these massaged numbers that maybe might have, let’s just say a tenuous relationship with the truth. But that’s just me, don’t clutch your pearls, sorry I triggered you.

Anyway, I will trade any stock. I am looking at this and frankly; you could wait for the stock to hit a new high. The only way it is going to do that is if it has some really serious momentum. And if that’s the case even getting in at a new high is still probably going to a real profitable trade.

You could actually start building a position here where it is now at 1490.00ish, something like that. And then you’ve got a stop; let’s give it 10 or 11 percent. You have to give it a little extra room more than you normally would you take a smaller position. But you can be buying the stock right here at 1490.00. Keep your stop around 1350.00 and that is going to be a really good defined risk, almost unlimited profit trade on Tesla ( NASDAQ: TSLA ); so check that out.

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