TSLA was probably the biggest contributing stock name to my 2016 P&L … I nailed it pretty well with a couple of calls using broadening patterns. Here is a chart I posted back in August shortly after I had gone short …
TSLA Weekly Chart (as posted on August 29th)
That lower parallel line did in fact act as support and I have been following along as price squeezed higher. Today, price basically touched that median line once again.
TSLA – Weekly Chart
TSLA – Monthly Chart
Not only has price pushed up to the important median line in the weekly chart’s broadening pattern, price has pushed right up to the top of the monthly trading range that has developed since 2014. Depending where you want to consider the important levels, TSLA is pushing into levels that have never seen a closing monthly candle.
TSLA has been a great intra-day trader but I am thinking that Elon Musk and the greedy Wall Street bankers are going to be coming to the market with another equity offering – typically they wait until after a monthly OpEx is completed so I would think that we will see a public issue before the end of February.
The reaction to the raising of capital could mark a high for the stock as the squeeze pressure is lessened with the increased available float, but the Wall Street bankers are sure to put the name on their recommended lists and try and drive the price higher so they can complete the issue’s greenshoe.
Bottom Line – I think the squeeze is almost over in TSLA here, and I am expecting an equity offering in late February. The stock will be in a position to short once again in that May-August time period. Until then, take advantage of intra-day trading and enjoy the ride.