I pounded the table for TSLA in late 2019 when Cathie Wood of ARK Invest had a $4,000 price target on pre-split TSLA while it was trading around $350. It hit $4,000 12 months later in Dec 2020. Her worst case scenario was a doubling in five years. It doubled in 90 days. At that time I recommended TSLA to my subscribers, both paid and freebies here on the All Allan Blog (link), most notably the Jan 2021 $420 call. Those who took that advice know who you are. Kudos. Those that did not, it is time to step up. It sounded crazy and just pie in the sky hyperbole in December, 2019, just as it does today. There aren't many second chances in trading and investing, but here is one front and center, Easter Weekend, 2022. It's your call, both figuratively and literally.
From my Blue Line Premium Weekend Update, sent out to paid subscribers on Saturday, April 16, 2022
Weekend Update: Eyes On The Prize
Ark Invest has published a new expected value analysis for Tesla into 2026, making the case for a mid-range estimate of $4,600/share. If you read this linked article to the end (34 min read), projections are extended into 2030 with share price extrapolated to as high as $25,000. For now, let's stick to the next 4-5 years:
A year ago ARK projected a price of $3,000 by 2025, so to bump it up over 50% in 12 more months is a testament to just how bullish they consider the underlying fundamentals. Insofar as Ark has been spot on, or more accurately way too conservative, since 2018, this is a number we can plug into our technical analysis and turn into a multi-fold series of option trades over the next 2-4 years.
What may be even more electric than the $4,600 projection is that it isn't even their "bull case" scenario. If the bullish case unfolds, their projected share price by 2026 is $5,800. On a bearish note, they also have a "bear case" scenario if things don't pan out as expected: $2,900. In other words, worst case a triple in four years, best case a six-fold increase in four years, and most likely outcome, between 4X and 5X in four years. Remember, their 2019 projection was $4,000 by 2025, a pre-split level that was reached in less than 2 years. A similar underestimation puts TSLA at $5,800 in 2024, the same year as the currently furtherest out option expirations: Jan and Jun 2024.
A Jun 2024 $2,000 call, trading today at $14,000 will be worth $380,000 should the shares be at $5,800 by expiration. If TSLA reached the expected target, $4,600, that Jun $2000 call will be worth $260,000. If TSLA is trading at the bear case level of "only" $2,900 at Jun 2024 expiration, the call will be worth $90,000.
Worst case: $14,000 becomes $90,000. Best case: $14,000 becomes $380,000. Most likely case: $14,000 becomes $260,000.
Those gains reflect buy and hold option returns. We don't just buy and hold TSLA calls, we trade them, rolling up expirations and strike prices when appropriate. Those buy and hold returns will pale in comparison to what will be possible trading strategic entries/exits with our trend trading tools along that upward trajectory. We have a rocket our pocket and all we have to do is stay focused on price patterns, emphasizing trend lines and channels, and of course, keeping our eyes on the prize.
Fibonacci Extension Tool: Long-Term Price Targets
TSLA: Our Best Closed Out Option Trade (so far)
2026 and Beyond