Tesla: Time For A Pause
Three months ago, when Tesla (TSLA 0.00%↑) was trading at $173 per share, we placed a bullish bet on the company (Trade Alert: EVs).
In that post, we wrote,
The first one is the most obvious one, Tesla (TSLA -0.61%↓). Its shares are down about a third year-to-date (YTD). First it missed its Q4 earnings, and then it posted an 8.5% year-over-year decline in 1st quarter deliveries, driven in part by shutdowns of its Giga Berlin factory. Tesla shares were trading at close to $250 at the end of 2023; our bet below is that they’ll be trading at over $205 next January, and if we’re right, we’ll make a ~200% gain.
Flash forward to July 10th, and Tesla shares were up 52% since then. We’re still bullish on the stock long term, and are still holding our bet that the stock will be above $205 in January, but Tesla’s looking a little overbought here, with an RSI (Relative Strength Index) above 87.
Chart via Chartmill.
The trade we have teed up for later today is a bet that Tesla pulls back about 3% by the end of next week. If we’re right, we’ll make a profit of about 150%; our worst case scenario is a loss of 100%.
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