TSLA Reports and goes for a deeper dive SHORT

27 gen

On this 4H Chart, I find good cause to continue my lot of 10 put options on TSLA. TSLA has

dropped another $ 25.00 per share price during the earnings report time frame. While the

overall long time frame supertrend is up, TSLA is presently in a sustained pullback likely due

to significant fundamental and economic factors. The antics of its CEO demanding an award of

more shares so he can launch a big AI initiative within TSLA is not helpful. He has taken a big

haircut but he can easily afford it.

In the analysis, TSLA has put in a bear flag which suggests more bullishness in the continuation.

The ceiling of resistance right now is the POC line of the volume profile at 230. If price can

get through that then 265 at the top of the volume profile's high volume area might be

achievable. A bottom may be the second lower VWAP band at 175 which could be reachable

in the latter part of the upcoming week. Weakness in the Chinese economy is a heavy weight

on TSLA right now. Bright days ahead but some pain and chaos in the meanwhile

Trade plan: I will hold the puts until I see a reversal pattern on the 30-60 minute charts and

then close them. If no reversal pattern in the upcoming week, for purposes of time decay

complications I will roll the puts out another 28 days. Overall, TSLA continues to pay traders

well some of them might buy a TSLA to return the favor with the profits received especially

if there are more price cuts on the horizon that do not adversly effect margins and fec\deral

subsidies are extended they would be an uplift to sales, revenue and outlook overall.

6 feb

Trade attivo

TSLA popped more OTM puts striking $175 from a current price of 185 got a better price on the jump.

13 feb

Nota

TSLA appears ready to fall again in sync with the general market correction on the hot inflation report. I have added to the position during the dead cat bounce.
TSDD is an ETF inverse to TSLA and 2x leverage to take a look at if you are shorting TSLA.

14 feb

Nota

Barron's · 2024/02/13 22:30 GMT-07:00
Al Root

Tesla stock has been having a terrible start to the new year. Figuring out what has been driving shares can be difficult for investors. Figuring out why the shares have declined so much is a relatively easy task.

The answer lies in the wisdom of crowds. Look at Wall Street earnings estimates. They are the numerical reflection of all the news impacting any company -- Tesla included.

Coming into Wednesday, Tesla stock has fallen 26% this year while the S&P 500 and Nasdaq Composite have both risen about 4%. It's the worst start for Tesla shares since 2016 when they dropped almost 40% over a similar span to start that year.

The drop this year is steep, but the size of it makes a lot of sense. The current consensus call for Tesla's 2024 earnings per share is about $3.08, according to FactSet. The estimate started the year at about $3.84. Estimates have come down about 20%. The fall closely mirrors what Tesla stock has done within a few percentage points.

Looking back to October -- just before Tesla stock dropped 9.3% after the electric-vehicle company reported third-quarter earnings -- Wall Street's earnings estimate for 2024 was roughly $4.50 a share. The estimate is down about 30% since then. Tesla stock has fallen about 24% over the same span.

Analysts don't change just one estimate at a time. Wall Street's 2025 earnings estimates are down as well, roughly 20% lower since the start of the year. Taking a longer view, 2025 estimates peaked north of $8 a share in December 2022. They are down 50% since then to $4.23 a share. Tesla stock has fallen 55% from its all-time closing high of just under $410 a share reached in November 2021.

Estimate revisions are a useful tool for investors to check if stock moves make sense. When they line up -- as they have with Tesla lately -- it's a sign that investors are worried about company fundamentals. When revisions and the stock moves don't line up, it's a signal that something else is on investors' minds.

Remember Twitter? Tesla CEO Elon Musk tweeted that he had made a bid for Twitter in April 2022. From that tweet, through the end of that year, Tesla stock dropped some 60%. Wall Street's estimates for 2023 earnings -- stocks always trade on future earnings -- rose from about $4.68 to $5.59 a share over the same span.

The divergence shows that Musk's Twitter distraction bothered Tesla investors. After those fears faded, Tesla stock doubled in 2023 despite vehicle price cuts and rising interest rates.

To be sure, estimate revisions can't do everything for investors. They can't tell them exactly what is going on at a company. There are many reasons Tesla's earnings estimates have been coming down. For starters, there are those price cuts that have hurt profit margins. And those higher interest rates have made all cars more expensive for buyers. There also is more EV competition around the globe and Tesla doesn't look like it will have a lower-priced model that can help expand its addressable market until 2025.

Those are some of the headwinds the company faces. Those headwinds have been evaluated by more than 40 analysts, resulting in lower earnings estimates. Investors have reacted to those reduced estimates by sending Tesla stock lower.

On a very basic level, that's how the stock market is supposed to work.

Write to Al Root at [e-mail]

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.


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February 14, 2024 05:30 ET (10:30 GMT)

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