Earlier today I executed a “probing” trade by buying TSLA September $215 calls. There are a couple of reasons. First of all Goldman Sachs turned bullish: analyst Patrick Archambault upgraded the stock to buy after rating it as “neutral” for the past 3 years; he kept his price target to $250.
MarketWatch reports that “Archambault said Tesla’s volume targets appear “ambitious”, and although there are fewer potential stock catalysts ahead of the Model 3 update next year, he believes investor expectations “seem more grounded” following the recent selloff in the stock. He said the current share price doesn’t fully capture Tesla’s potential to disrupt the auto industry.”
This kind of move from a major analyst can turn around the stock in a major way. Secondly, technical indicators are finally turning around: the pay-day-cycle (Heikin Ashi) has the first long green bar, and the MACD is “pinching” and turning positive (see chart from Wall Street I/O).
TSLA stock is not yet firing with all cylinders (oops, Tesla has no cylinders; well, you get the idea), but these are early signs of a possible move back to a bullish behavior: aggressive traders will enter a small probing trade like I did; more conservative traders will wait until both indicators are positive (MACD crosses to the bulls, and Heikin Ashi has at least 2 green bars). I plan to add stops, probably around the $206 support level, just in case the stock goes against my trade in the coming days.