[This is a copy of the weekend update that went out to Blue Line subscribers this weekend.]
By Blue Line Trading on May 30, 2020
In this April 15th article in Institutional Investor Cathie Wood reiterates her $6,800 by 2024 price target on Tesla (Cathie Wood Still Thinks Tesla is Going to $6,800). The stock was at $750 at that time, up from a $350 low on March 18th just before the market began its recovery rally. Someone was buying with both hands, besides us at Blue Line Trading. Along with our core positions put on last December, we had two new Buy Signals, on March 25th in the Premium Service and March 31st in the PRO Service. These are what we euphemistically call, "trading positions." Those two recommended calls are up 302% (PRO) and 150% (Premium) respectively. The original Jan 2021 $420 call is up 1080% while the stock is up 150% from our December 9th "Game Changer" recommendation.
Our TSLA Trades
Below are summaries of all of our TSLA trading signals, long, intermediate and a few shorter-term trades, since our December 9th Tesla "Game Changer" recommendation. The results speak for themselves. Even in the shadow of a major market meltdown, these trades are indicative of an exponential trajectory to $6,800 and beyond. Look at how fast TSLA came back from the March low, up 140% in just two months. Whatever the stock may give back in an extended market pullback, it will earn back, plus, subsequent to eventual market lows. We don't have to time TSLA trades, we just have to take them.
TSLA Trades PRO Service
TSLA Trades Premium Service
(1) The trade tables compare the results based upon using a 50% trailing stop...or none at all (represented by "Current Return" columns which are also expiration day prices for expired series). Included in column "R" is the 'Maximum Return" each call reached during the term of the option. We don't know what is the absolute best way to exit these trades, but if you can handle the drawdowns of multiple 99% losses, trading without a stop generates almost twice the average return per trade.
(2) The PRO Service suffered through 5 total losses in a row, the Premium Service three total losses in a row. In both cases, the total loss trades came within a couple weeks of each other (i.e. "Repeat Signals) so it is doubtful anyone would have taken each trade shown in the table and to some extent the same can be observed for some of the Buys). Still, even with drawdowns from successive trades, average returns are outstanding.
(3) The 50% trailing stops, although a significantly lower return per share, ameliorate the sting of successive total losses and with both service's 50% trailing stop returns per trade up over 200%, trailing stops on at least a part of any one position may be the best approach for most accounts.
“I’ve always said to analysts, wherever I’ve been a portfolio manager, that the truth wins out,” Wood says. “If we’re right, we’re going to be rewarded.”
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