COMPANY NAME – Tesla
TICKER – TSLA
MY OPINION (JUST MY THOUGHTS, NOT ADVICE) – I think the dumping is over. This last dump has me licking my chops.
STRATEGY USED – I sold a put spread.
My Thoughts On Tesla – TSLA Stock Price
TSLA Stock predictions are all over the place, and I while I don’t know if we will ever see $420, I do think that it may go up, if only temporarily, from here. I am basing this on technical analysis, based on the charts below. I am not recommending you buy or sell any stock or option, but I am telling you what I did. This is more of an explanation on how to trade stock options, and should not be considered financial advice.
I always start my stock market research at FINVIZ.com. They have the best combination of news and charting tools, IMHO. Mr Market has been punishing TSLA over the last few weeks, and from what I am looking at, the selling seems to be getting exhausted.
It looks like there may be some resistance here, TSLA was at $262.63, so I decided to sell an out of the money put spread for October 2018 expiration. I chose to sell the 230 puts, and buy the 225 puts. I did so in my Tastyworks account, and below is the screen shot.
You can see the BID/ ASK is a little wide, but for this 5 dollar wide spread I collected $116. So I my risk is the width of the strikes, less the premium I collected. (230 – 225 – 1.16) = $3.84. My max reward is the amount I collected, $1.16 I have 42 day until expiration.
Below you can see TSLA stock is at the lower bollinger band. This doesn’t necessarily signal a buy, and to be honest, any of you bollinger band traders, wouldn’t say this is even close to being a good buy. Since I am using options, I don’t strictly go by technicals. I give myself some room, since I sold 230 puts.
Fibonacci Pivot Points
You can see from the chart above that TSLA stock quote is close to S2 at 264.43. The spread I sold is closer to S3, which is 226.51.
TSLA RSI shows it is oversold at 27.03. If you are going to buy the TSLA stock outright, you should wait until it rises above 30.
Looking at the MACD below, TSLA is still showing some downwards momentum.
Well, the STOCHASTIC for TSLA is showing a buy signal. When I am looking to go long or short by selling options, this is the technical I look at the most. It gives the earliest indication, in my opinion.
I went long on TSLA stock today. I sold a put spread, with my short strike being around the 30 delta. This means that it only has a 30% probability of getting in the money, at 42 days until expiration, time decay is working on my side as well.
Again, I am not a financial adviser, and am not recommencing you buy or sell TSLA stock. I am just letting you know, what I did, and hope you understand how to trade stock options better.
If you have any questions, I would love to hear from you. Leave a comment below.
Until next time.