Housekeeping: Next week is Thanksgiving and trading is traditionally light and uneventful. Expect little, if any action. Post Thanksgiving into mid-December is a different animal. Rest up and be ready. Good, Better & Best The Good: TSLA closed Friday 16% above its $978 low on Monday. Good enough to assume that the 38.2% Fib level held the retracement almost exactly, within less than $5, about .02%. That is why we watch Mr. Fibonacci. The Better: The House passed a massive EV tax credit that should result in a tremendous number of new pre-orders for the Model Y and Model 3, both of which already are on 4-6 month out deliveries. If the credit comes through unscathed by the Senate, expect that wait line to stretch into 2023. The Best: Unless you have been hiding under a rock you are holding TSLA shares, calls, LEAPS and/or all of the above. Next target is new all time highs above 1250, then 1500-1800-2000; a path to $2,022 in 2022. It's not too late to buy or add and they way things are going it may never be. TSLA Options 101 Last weekend, I highlighted the Jan 2024 $2,475C as being the furthest out expiration and strike option available, then trading at $115 ($11,500). TSLA was up 10% this past week and the call followed the stock higher, closing at $156 ($15,600), for a gain of $4,100, or 36%. That is the key takeaway for trading this kind of LEAP, not whether you will have enough money to exercise the call at expiration ($247,500), but how well the call will track the stock in its upward trajectory. Stock up 10%; option up 36%, and there remains a whole lot of time to sit and wait for more good things to happen to the company, the stock, and of course, the option. That is how I evaluate TSLA options and why I gravitate to further out expirations and out-of-the-money strikes. That is also why whenever my call gets to close to being at-the-money I want to roll up to a further expiration and higher strike price. $2,200C for 2022 For rolls-ups, add-ons, or initial call positions, and trying to keep price under $100 ($10,000), I like the Jan 2023 $2,200C, closed Friday bid $85 ask $95. It was +50% last week on a 10% gain in stock price. "E" For Earnings - Past & Future UVXY Edging ever so close to an Intermediate Term Buy Signal. Going into next week it looks like it will take a move above $17.25 to trigger. The biggest threat to the TSLA narrative is an out of the blue market event to the downside that takes no prisoners. Month-to-month, betting on a volatility spike provides a hedge should that occur. UVXY Buy Signals should not be ignored.
