Tesla Stock Weekly Chart
As noted above, it has been a good start to 2017 for TSLA. Shares are up about 6% and demonstrating relative strength versus averages like the NASDAQ Composite and S&P 500 with gains of around 2.7% and 1.1% respectively.
It’s our view Tesla shares will continue to motor ahead as well. It’s a point of view discussed just over a week ago.
Technically, after nearly three years of volatile, but mostly stalled and lateral price action, TSLA is due to make a meaningful move in 2017. With its early out-the-gate gains, shares of Tesla have also reclaimed and tested the 200-day simple moving average for support and broken out to fresh 4-month highs.
Net, net Tesla looks good overall. Of course, that’s not to say it’s all puppy dogs and rainbows for the cult of TSLA bulls. The provided weekly chart of TSLA suggests shares still face overhead resistance from congestion and a trend line or two. And on this time frame, Tesla is overbought based on its stochastics.
TSLA Bull Call Spread
Last week’s discussed March $230/$250 bull call vertical notched intraday gains in excess of 50% or $2.50 in profit during yesterday’s session and definitely worthy of adjusting. Having said that and after reviewing the board for fresh ideas, I still like this spread as a way to ride TSLA higher.
Currently and with TSLA at $228.40, the vertical is priced for $6.95. The spread stands to gain $13.65 or 215% if shares of Tesla can rally 9.5% and through $250 into March expiration.
As stressed last time though, our preference is to either exit or adjust the position during the life of the position as TSLA begins to move up or down — and either validating or wrecking our bullish position on the name.
Investment accounts under Christopher Tyler’s management do not currently own positions in any of the securities or their derivatives mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT.