Tesla surprises to the upside with earnings and is currently trading in the pre-market up 52 points, +9%, to 633 which is a record high. Dear Lord, TSLA tagged 650 a couple hours ago (pre-market). Elon Musk performs a victory lap. Investors are believing in those glorified electric golf carts. Humorously, in the US, one-half of these silent movers are sold in California, the land of fruits and nuts.
Folks living in rural areas would be stupid to buy an electric car when a gas station is on every corner. Tesla is selling cars hand over fist in China. CEO Musk dances like a rigid fool on stage celebrating the communist car sales. Like Stuart Smalley, Musk boosts his inner self esteem whispering to himself that doggone it, people like me. The Chinese are simply using Tesla for its technology. Musk would be better served to study history of the textile industry, auto industry, steel, etc...
It is guaranteed that China has built a duplicate factory to the Tesla factory and is sucking every bit of technology it can from the auto maker. China has several fledgling electric car manufacturers and dollars to doughnuts they will serve Tesla's technology to their electric car manufacturers on a silver platter. Is Musk really that stupid not to know how the communists are playing him? Perhaps he does know and is playing dumb planning to skate away from Tesla while the gittin' is good and before all the trouble hits the fan down the road. Time will tell.
Tesla produced 360K vehicles last year but Musk brags that the electric car maker will build over 500K vehicles this year 42K vehicles per month. This number impressed analysts and strategists so TSLA stock is bought with reckless abandon. Interestingly, at the same time, the stock is receiving the mother of all short squeezes. It is quite phenomenal price action. The shorts are running for their lives creating massive upside rocket fuel. The higher price shot up, the more the shorts panicked, and more shares needed covered, creating more panic buying. What a sight. Shorts probably curse the day they got involved with Tesla. Musk has the last laugh for now.
TSLA is conceived in 2010. It begins with a couple-year ascending triangle pattern which pops price towards one hundo. TSLA never looked back. Price is parabolic so by definition, has major momentum, so it takes a little bit of rail or runway to slow the freight train or airliner down. The RSI and stochastics are overbot agreeable to a pull back in the monthly time frame. Ditto the long-term neggie d. Those short green lines show the momo and juice still available due to the parabolic move higher. Thus, price will likely want to jog going forward as it tops out. So one month down and then the next month up to matching highs again, 600+, that will probably create negative divergence on the RSI and stochastics, but then one more jog is probably needed to roll the MACD line over with neggie d. So it can take 3 or 4 months for Tesla to top out and then die, however, that long-term neggie d must be respected which can shorten this time frame. A major top would be likely in TSLA in the Feb-April time frame.
The big up had a lot to do with short covering so it makes sense that it should not have a lasting fundamental impact on stock price. TSLA short interest is almost cut in half from about 25% down to about 14%. Open interest moves from 7% to 2%. A lot of the shorts have been wiped out and expunged from the stock.
The chart has the feel of a two-leg bull flag pattern but it obviously is not an official pattern because the middle consolidation zone should have a slight downward bias. Instead, TSLA has moved dead sideways for 6 years until the upside breakout now. Nonetheless, since symmetry is something to be respected and we can call it a pseudo-bull flag, the starting point is down at that 5-point gap at 38.4 to 43.4. If the first leg is to 280.4 (orange), that is 237 points difference so if price begins the second leg from 187, that targets 424 which is achieved. If you look at the light blue bull flag, price goes from 43.4 to 367 a difference of 324 points and if the second leg begins at 187, the target is 511 which is also achieved satisfying the pseudo-bull flags.
Price has extended far above the upper standard deviation band, that is quite a sight. The middle band at 307 and rising is on the table for the months ahead. Keystone does not plan on trading TSLA but will take a look at shorting it when it tops out in February-April.
Interestingly, Peloton may forge a similar path ahead. Anyone that spends thousands on a bedroom clothes hanger (stationary bicycle) and then $60 bucks a month for a talking head on a screen to tell you to pedal faster, needs their heads examined. So the shorts will pile into PTON since the business plan does not seem viable, especially when a recession is about to begin. However, these short sellers may experience a similar fate ahead as the TSLA short-sellers experienced, death by a thousand cuts and then your head is lopped off in the end anyway. Go Peloton girl! As Queen would sing, get on your bike and ride! This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added 9:38 AM EST: TSLA jumps 62 points, +11%, to 643.18. HOD 643.70. Elon Musk raises a glass of PBOC rice wine with the Chinese communists toasting the record stock price.
Note Added 12:49 PM EST: TSLA is at 643 and prints a HOD at 650.88, the highest number ever printed by Tesla in history. The last bear lays flat on the ground bleeding with a bull hoof print in the back of his skull.
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