My short trade has 3 parts to it: 1) technical price action 2) sentiment 3) fundamentals
TECHNICAL PRICE ACTION : As can be seen in the chart, at the end of a bullish move, we've got a final gap up which ends up forming dojis/ hammers/ or simply a big bearish candle. My point is, anything but bullish engulfings have marked the top and given a significant retracement almost EVERY time. This also typically happens on high volume.
SENTIMENT: Retail traders involvement is exceptionally HIGH ! Sentiment is overly optimistic
https://robintrack.net/symbol/TSLA
The link above is from robintrack; which reflects the robinhood trader involvement. Retail buying has gone vertical in May & June; this corresponds to the last $400 of move from $800-$1200. Thus, it's quite likely to see a nice flush out of dumb money in the very near future.
FUNDAMENTALS: Extremely over-valued stock and in the next down leg of the overall market, this should come back down to reality. I don't think the recent Q2 delivery numbers are something to get too excited about (down~5% YoY) as Q2 revenue & EBITDA is probably going to be a massive negative surprise. Further, I think Q3 & Q4 will be dismal which will finally end the hyper growth story for this stock.
TAKEAWAYS:
1) I think Q2 earnings coming out in July should be a negative surprise
2) I'm seeing a potential down leg in the overall market in July
3) Target is ~900 (25%) correction sometime this month. And mid 500's (50% correction) before the end of the year.
PS. Of course I could be totally wrong as I have been in the past by shorting this stock at lower levels and its only continued to breakout higher!
TECHNICAL PRICE ACTION : As can be seen in the chart, at the end of a bullish move, we've got a final gap up which ends up forming dojis/ hammers/ or simply a big bearish candle. My point is, anything but bullish engulfings have marked the top and given a significant retracement almost EVERY time. This also typically happens on high volume.
SENTIMENT: Retail traders involvement is exceptionally HIGH ! Sentiment is overly optimistic
https://robintrack.net/symbol/TSLA
The link above is from robintrack; which reflects the robinhood trader involvement. Retail buying has gone vertical in May & June; this corresponds to the last $400 of move from $800-$1200. Thus, it's quite likely to see a nice flush out of dumb money in the very near future.
FUNDAMENTALS: Extremely over-valued stock and in the next down leg of the overall market, this should come back down to reality. I don't think the recent Q2 delivery numbers are something to get too excited about (down~5% YoY) as Q2 revenue & EBITDA is probably going to be a massive negative surprise. Further, I think Q3 & Q4 will be dismal which will finally end the hyper growth story for this stock.
TAKEAWAYS:
1) I think Q2 earnings coming out in July should be a negative surprise
2) I'm seeing a potential down leg in the overall market in July
3) Target is ~900 (25%) correction sometime this month. And mid 500's (50% correction) before the end of the year.
PS. Of course I could be totally wrong as I have been in the past by shorting this stock at lower levels and its only continued to breakout higher!