TSLA: 2 Ways to Deal With Tesla Stock Right Now

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Tesla (TSLA) stock has been one of those that tends to move in fits and starts, typically triggered by the news and headlines instead of results, and it looks as through this isn’t ready to change.

TSLA: 2 Ways to Deal With Tesla Stock Right NowThe automaker had a great 2013 as the dream of electric cars zooming around the roads turned into reality. While other manufacturers had pint-sized versions of hybrid or electric cars, Elon Musk’s Teslas blew the market away with style and flair, driving the price of Tesla stock from $38 to $250 in a little over a year.

Two year later, the stock is still trading in a range with a mean price around $225 leaving investors asking “what’s the deal” and “is it time to get ready for a breakout in Tesla stock?”

The “deal” with Tesla stock is that they have yet to outdo themselves, which leaves the market in somewhat of a vacuum, as other automakers are beginning to develop more mainstream full-electric vehicles.

Now, the long-awaited Model X is beginning to be seen around town here and there as the company begins delivery of the electric SUV, but it will truly be hard for Tesla to move the needle on their stock without some more splash.

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TSLA Stock Outlook Long-Term

The technical picture for Tesla stock tells two different stories — one for investors (someone who is going to buy the stock and not sell for the next ten years) and one for the traders.

The investor’s (long-term) view is best described as a “hold.” After running to $250 and languishing in a trading range, Tesla shares are showing no technical signs that they’re ready to break higher or lower, just waiting.

Just waiting can be good and bad.

The bad: Fundamental investors have to get past the fact that earnings continue to show losses and Tesla stock is actually losing cash on each car sold.

The good: It’s hard to bet against a guy like Elan Musk.

Either way, as an “investor,” we would continue to hold Tesla stock until the time that shares break below the $180 level.

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Making a Trade for TSLA Stock

The “traders” technical story is much more interesting and potentially profitable. The stock has been bound by a 100-point range between $180 and $280. By the looks of the volume at these price points, the technical traders and short sellers are playing these levels heavily. That means that we’re likely to see a continuation of this range-bound trade, but there’s a current opportunity.

Looking at the stock today, in the middle of that range, there are signs that the next move is going to be towards the $280 ceiling.

Short sellers increased their positions in the last report by 2%, but more notable is the fact that Tesla’s short interest ratio is once again at its highest readings for 2015, setting the stock up for a short squeeze rally that is likely to take it toward $280.

At that point, the nimble trader will close long positions and take a short position on Tesla shares, as they are likely to target a move back toward the lower end of the trading range again.

As of this writing, The Johnson Group did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/12/tesla-stock-tsla-stock-two-perspectives/.

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