For this weekend's update I want to cover two themes that will have a significant effect on our trading. First, our new main squeeze, Tesla. Actually not so new as we have been buying and trading TSLA since 2017 (maybe as far back as 2015). We will start with the Dec 7th, 2019 "Game Changer" special report to review the intermediate and short-term run-ups. The other overriding theme of the week, and likely the weeks ahead will be the novel coronavirus, a huge unknown moving forward into the Spring of 2020. Tesla Key Price Points December 7, 2019 ("Game Changer") = $337 December 31, 2019 = $418 February 2, 2020 = $650 High on Feb 4th = $969 Close on Feb 7th = $748 Throughout this run we bought calls which generated significant profits across the board, with the exception of an ill-timed short-term position bought on Thursday which may have hit 50% stops in the downside volatility that followed. ("May have" refers mostly to what expiration and price were chosen for the trade. Officially, we were stopped out.) Longer term gains (Jan 2021 Calls) are still in tact and up about 900%, while Intermediate Term positions (from Dec 9th Buy Signal) were stopped for a gain of, coincidentally, about 900%. How many more times will TSLA have runs like this in the months ahead? Answer: How many months are there ahead? Last week ARK Invest came out with a firm $7,000 price target by the end of 2024. As you may recall from Game Changer, Cathy Wood, CEO of ARK Invest, has absolutely nailed Tesla from the beginning (circa 2013-2014). That she and her talented staff have gotten this company and stock right for all of these years gives their analysis extreme credibility. That's seven years of them pounding the table, and buying the stock for all of their self-administered ETF's and funds, and not giving up. So with $7,000 a credible target, TSLA should finish this year well above my own $1,000 target, which as of this update is now $1,500. It won't be a straight line, so expect a couple trades a month going forward, at least one of which will be well into the triple digits. If you want to just trade TSLA for the rest of the year, I can't blame you. We have the system(s) in place to do it. From The Tesla Archives Tesla (TSLA) and Ark Innovation Fund (ARKK) - July 7, 2018 The Time Traveler's Dilemma - Aug 5, 2018 TSLA Short-Term Trader - Aug 12, 2017 And Finally: Best Tesla Video of The Week (not mine) - Feb 7, 2020 Below is a chart of the TSLA Jan 2021 $420 Call which was recommended in the Dec 7, 2019 Game Changer report. At the time of the recommendation the stock was at $335 and the call was $85 out-of-the-money. If all you had was $3,500 to invest, you could have bought one share of stock, or one of these $35 calls ($3,500 per contract). Coronavirus This is such a wild card. On one hand the fear, other than the obvious, a 2-3% death rate, is that if China shuts down, so does global commerce. Right now there are 400,000,000 people in quarantine in China. The "official" numbers out of China 30,000 infected and 600 deaths seem way out of proportion to that number of people in lockdown. What do they know? On the other hand, China is flooding its capital markets with liquidity, which in turn is supportive of the financial markets. The message is that no matter how bad it gets, the central bankers will take care of it, i.e., "Nothing to see here." We can move quickly while the markets are open, but not so much over the weekends. While not all crashes in history have been on Monday's (October 24, 1929 was a Thursday), having some worst case insurance over the weekend is something to get used to until the coronavirus uncertainty fades and gets under control. A Sampling of Recent Coronavirus Headlines White House Asks Scientists To Investigate Whether 2019-nCoV Was Bio-Engineered Doctor Warns Up To 30% Of Medical Staff Working In Wuhan Hospital Now Infected With nCoV The Coronavirus Is A Nightmare For The Global Economy Blue Line Trades - Performance Tables Premium Service PRO Service
