Words Of Wisdom For Those Holding Tesla Stock
Jani Ziedins | Oct 26, 2021 12:14AM ET
All of the headlines are screaming Tesla (NASDAQ:TSLA) is now a trillion-dollar company. That’s a huge milestone for the stock and puts it in rarefied air. But telling us about this after it already happened doesn’t help anyone make money. We need to know about these things ahead of time!
Well, it just so happens TSLA was on my radar this summer after it bounced nicely off of $600 support. And I told readers as much back on July 12:
"Far more important is $600 support. Fail that and it could trigger another wave of defensive selling. But until that happens, last week’s bounce just above support is buyable. That said, this doesn’t get real interesting until it gets above recent resistance near $700, but so far, so good."
Well, not only did TSLA get interesting above $700, but it started looking even more fabulous above $800, $900, and now $1,000.
Now don’t get me wrong, I am most definitely not a TSLA bull and this looks as sustainable as all those dot-com names back in 2000. But I’m a trader and it doesn’t matter to me where this stock will be five years from now. If it is going up today, I want to be aboard and enjoying the ride. We can worry about all of that other stuff when it eventually becomes an issue. Until then, “don’t worry, be happy.”
As for what comes next, the risk/reward was stacked nicely in our favor back at $600, but now it has done a 180 and is totally skewed against us. Owners with a huge profit cushion and a big appetite for risk can continue holding to see how much higher this goes, but keep trailing stops nearby because this can fall as quickly as it rose. It would be a real shame to let these really nice profits escape simply because we got too greedy.
And for those that missed this trade, well, it happens. Chalk it up as a learning experience and let it go. After rallying nearly 70%, there is far less upside remaining and the risks up here are gigantic!
If a person really likes this stock, stay patient, there will be a better, lower-risk entry point. It might not happen next week or even next month, but there are smarter and less risky ways to jump aboard this trade.
Remember, only fools are chasing this stock up 70%. Don’t be a fool.
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