Weekend Update: TSLA, TSLA, TSLA

I sent this out to subscribers of Blue Line Trading on Saturday. Nothing has changed, except the price of TSLA and options identified below. Still a Buy, Buy, Buy. 


Going into the new year TSLA was named my "Stock of The Year" for 2022, after which it promptly fell from $1,243 to a closing low of $795 on February 24th, a decline of 36%. On Friday it closed above $900 and so long as TSLA is above $900 we are back to accumulating and trading on the long side.  

Intermediate Term with Fib Price Projections

TSLA Calls/LEAPS Strategies

So long as TSLA remains north of $600 the price targets on the above chart are not just targets, they are expectations. The unknown is timing, when those levels will be achieved. That's where the $900 key price level has its role, as the further north of $900, the faster the above price expectations will be realized.  How aggressive to accumulate these new calls depends the amount of TSLA exposure already being held. Without knowing the amount of TSLA shares and/or calls individual subscribers may be holding, all I can point out is that it is probably not enough. 

Bottom Line: The higher TSLA rises above $900, the more shares/calls/LEAPS should be accumulated and held. 

New TSLA Call Ideas

TSLA rose $33.79 on Friday, approximately 4%. The calls below have two attributes in common: (1) There are six months to go until expiration, and, (2) These out-of-the-money options rose a minimum of 20% on that 4% move in the underlying share price. That is a lot of leverage. Accordingly, I consider these "trading" calls as opposed to "buy and hold" calls. For the latter I would stick to LEAPS, which are options with expirations longer than 12 months into the future. More on those in future updates.

TSLA Sep 16th $1,200C $54.20 = $5,420  (+20% Friday) 

TSLA Sep 16th $1,500C $19.12 = $1,912  (+24% Friday)

TSLA Sep 16th $1,800C $7.40 = $740  (+39% Friday) 

Note: The failure of price to hold and close above $900 tempers my enthusiasm for buying these calls.  I bought an initial position in the $1,500C on Friday, but will not buy more if price dips below $900. If price keeps rising, I will be adding more, commensurate with the speed and magnitude of the rise.