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Wednesday, November 6, 2013

$tsla potential trading dynamic

Good numbers coming out of Tesla last night. Free cash flow positive, and margins increasing. Of course the illusion of greatness is now fading, and the reality of "pretty-damn-good" is kicking in, so the market must sell it off. (AMZN will have a cluster-fuck day when it's time comes.)

Tesla' valuation is only limited by ones imagination, but now that it is declining, let's look at a realistic trading pattern. Last time tesla broke its weekly 50sma, it saw about a peak 15% decline from the moving average. 

Assuming the same can take place, if the 20sma is broken from near-term declines, tsla may approach $80-90.

Looking to play tsla on the long side at those levels. Until then, will still look to trade on the short.

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