I expected a bump up in the stock price this morning because of Friday's bullish run up and an additional run up during after-hours trading. Lo and behold, we got it, I sold a hundred shares with which to buy leaps and since the porridge was much too cold for TSLA's tastes, I went back to sleep (trading begins at 3:30am here in Hawaii). During my slumber, someone heated up the porridge! The NASDAQ turned green while Dow remained red, which is the perfect temperature for TSLA to do well. Upon waking and discovering this porridge heating, I bought a call just to stay neutral in my holdings for the day and awaited the results. Alas, TSLA ran higher, despite running considerably above the upper bollinger band. I promise to reread my own words from Friday's post about in this environment "not getting too tempted to play the dip games". At least the results were relatively neutral. We're only a week away from the release of Q1 delivery numbers. If they're good, I expect a nice bounce up. There's a real possibility that they might not be stellar, though, so again I caution on short-term trades.
What is so exciting about TSLA right now is that it is poised to jump out the the 180-280 trading range of the past two years and redefine a new, higher trading range with the arrival of Model 3 and the maturing of Tesla Energy. When we leave 280 behind, TSLA destroys the main thesis of the casual shorts, which is that TSLA is at the top of its trading range and ready to start the downward move again. When that thesis is destroyed, shorts will start covering at a time when new longs are jumping in. Since more than 30 million shares remain shorted, there's a really good chance of a mass exodus of shorts this year and a corresponding quick rise in the stock price. Don't be caught short, so to speak.
Today's technical chart is illuminating. The close at 270.22 is more than 2.5 points higher than the upper bb at this time. You can take that as a bullish sign of things to come, and you can also take it as a cautionary note regarding the next couple of days, depending upon how you read the tea leaves. I expect the stock price to fall within the upper bb soon, due to the combination of the bb rising and the stock price run up moderating a bit until the upper bb catches up. Typically, we don't see TSLA above the upper bollinger band for more than a couple days in a row. If it remains above that level for three or more days that might be a sign that it's itching for a break out, but I think a real break out would require news of substance. Of course good Q1 delivery numbers could provide that news, and they might not either. Looking forward to seeing the numbers.
Conditions:
* Dow down 46 (0.22%)
* NASDAQ up 12 (0.20%)
* TSLA 270.22, up 7.06 ((2.68%)
* TSLA volume 6.0M shares
* Oil 47.79, down 0.18 (0.38%)
* Morning's Fidelity short share drawdown or (covering) and interest rate:329,000 drawdown, 1.00% (down from 1.25%),
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