TSLA

Like Tesla's sportster, the stock can go from zero to sixty in under four seconds  -- behavior that at once courts danger and opportunity. The chart shown evinces plenty of the latter, with a short-squeezed opening bar that turned out not to have been a bull trap. Notice how the high of that bar got past peak #1 without breaking above #2. That's about as 'camouflaged' as gap-up openings get, but even then you'd have needed to ride the whirlwind for the rest of the day just to eke out a $2-per-share gain. From here, the best play I could imagine on Wednesday would come on a quick (i.e., 90-second or less) pullback from pennies above peak #2. If it takes the form of a sharply etched b-c leg, I'd suggest jumping aboard at the 'x' entry without thinking about it. _______ UPDATE (10:45 a.m. EDT): This time the opening was a bull trap, with the stock touching 150.31, just above peak #2, on the first bar before diving to a so-far low of 146.25. Since there was no C-D rally, we did nothing and hold no position.

Tesla-mania quite obviously has a grip on fad-dependent Wall Street, tracing out a parabolic rally that has drawn strength from a story that even widows and pensioners can love. The week's Big News (out of MIT, no less) is that Tesla's battery technology is way ahead of other carmakers' -- so much so that it may someday be possible to recharge a Tesla's batteries in five minutes. So felicitous have the headlines pertaining to Tesla been lately that one might think the company had hired one of those Hollywood PR firms that somehow gets America all jacked up over the latest Hollywood blockbuster. Anyway, our purpose here is not to argue with such insanity, but to provide accurate predictions and guidance for traders. In this case, judging from the ease with which the stock blew past a clear Hidden Pivot resistance at 142, we'll lay odds that it will get to at least 168.23 (see inset) before DaBoyz need to refresh their story. (Tesla Discovers a Cure for Cancer' ?) Accordingly, 'camo' traders should be looking to get long. Keep in mind that the scarier a trading vehicle acts, the easier it is to use camouflage tactics successfully.

Let's try to buy the August 140-145 call spread four times for 1.50, good for the week. This order should be worked as long as the stock is trading 134.00 or higher. Our rally objective for the underlying stock is the 142.47 target of the pattern shown.  I may suggest turning the spread into a butterfly if the stock rallies after we've got the 'vertical' on. That would entail selling Sep 145-150 call spreads against those already owned. _______ UPDATE (August 1):  There was a report in the chat room of a 1.50 fill on the spread, but it would appear the trade was done with TSLA below $134.  I'll establish tracking guidance nonetheless if two more traders report fills with the stock above $134. _______ UPDATE (August 5):  If you're not already aboard you can forget it, since the little dervish is already halfway to our target.  Camouflageurs may still be able to get some mileage out of the move, since we at least know where bulls are taking this stock.

The second leg of Tesla-mania has stalled, but we should have no doubt that the 147.44 rally target (see inset) will be fulfilled. Assuming the stock doesn't blow higher without fully correcting the last upthrust, the most logical spot for bottom-fishing -- we'll try to do it with call spreads -- would be the 108.35 midpoint support of the pattern shown.

The 119.52 rally target first broached here a while back should have been a piece of cake, but Tesla has in fact been struggling to get there. However, yesterday's rally peaked just above a small 'external' peak at 104.26 recorded on 5/31, generating the first bullish impulse leg we've seen on the hourly chart in weeks. You can use this chart to orient yourself toward the new target at 120.42, but 'camo' risk avoidance when initiating a buy will best be found on charts of 15-minute degree or less. _______ UPDATE (June 19):  DaScumballs who control this stock and who engineered May's spectacular short squeeze to distribute shares bought at much lower prices evidently are in accumulation mode once again.  How else to explain the adroit timing of a story planted in The Wall Street Journal yesterday that described Tesla's troubles setting up a dealer network in states with laws that zealously guard car dealer monopolies?  This story, played on the front page, could have been written at any point along the way of Tesla's vertical run-up.  The fact that it ran when it did attests to the power and cunning behind the rigged game that is Wall Street. _______ UPDATE (June 24, 8:25 p.m.):  Three weeks of sideways tedium could make one forget that there are still higher targets outstanding.  That is indeed the case, however, and the 120.42 target given above should be kept in mind as a minimum bull-market objective. ______ UPDATE (July 3, 11:00 a.m. EDT): Yesterday's high at 121.89 fulfilled our target.  Traders should position from the short side now. _______ UPDATE (July 8, 3:14 a.m. EDT):  The pullback from our target amounted to a little more than $7, but traders would need to have been nimble to get shorts covered near the low, 114.27.

The chart shows a picture of a stock that just doesn't want to go down. Two incipient C-D legs have now reversed shy of their respective midpoint pivots, and we should therefore infer that if and when the broad averages turn higher, TSLA is going to lead the charge. Traders should seek opportunity on the 15-minute chart, where you can see how yesterday's selloff into the close was merely the b-c correction of a robustly bullish impulse leg.

Today's commentary proffered some potentially spectacular outcomes for Tesla-mania, but for those looking for the next day-trading opportunity in the stock, the 119.52 target shown should be used as a lodestone.  'Camouflage' cover could be difficult to find in a rally so far advanced, but if the stock is going to hit 119.52 today, your best bet might be to monitor Wednesday's opening on the one-minute chart for the first ABC pattern that meets our simple rules.  Click here if you're interested in learning those rules. ________ UPDATE (June 4): The hourly chart has swung to bearish, and although this has not invalidated the 119.52 rally target, it will shift our focus to the corrective pattern now developing (see inset, a fresh chart).  If the stock is bound significantly higher we should see this pattern reverse -- possibly tradeably -- from around its 'p' midpoint support (which is as yet undetermined). _______ UPDATE (June 6, 2:25 a.m. EDT): Yesterday's bull-trap rally off a gap-down opening aborted the downtrend, although the move would need to hit 104.27 to generate a bullish impulse leg on the hourly chart. The fact that the rebound came from 3 cents above the 88.42 midpoint support (see inset, a fresh chart) is an additional factor that is short-term bullish.

Tesla got short-squeezed to within 28 cents of the 86.72 target I'd proffered early Monday morning, but a second-wind rally to 88.00 suggests it's got eyes for 104.44, the 'D' target associated with the first number. It can serve as a minimum upside objective for now, implying that all trades between here and there be positioned from the long side.  We'll plan on buying weekly puts if and when the target is reached, provided it happens before Wednesday of the given week.  Please note as well that a lesser Hidden Pivot at 94.19 (see inset) has the potential to stop the rally cold and can therefore be used for spec camouflage shorts. _______ UPDATE (May 28): Two weeks later, the 104.44 target remains viable.  If you're looking for a reason, it has been estimated that each automobile sold by Tesla has gotten a boost from subsidies of about $45,000.  Much of it comes from the tens of millions of dollars Tesla has received for selling zero-pollution credits to other car manufacturers.  This source of income, which alone accounts for the quarterly 'profit' Tesla just reported, will dry up after 2013, when other car manufacturers start delivering their own versions of the non-polluting car. _______ UPDATE (11:18 a.m. EDT):  The criminal lunatics who have pushed this rally opened the stock on a $7 short-squeeze gap to 104.63, just 19 cents from our longstanding target.  If you were able to get short there on my say-so (the stock has already had a $3 pullback), please let me know in the chat room so that I can establish a tracking position for your further guidance.  You should have taken a partial profit in any case, and now be using a stop-loss that will give you a small gain on the trade no matter

A query from Doug Behnfield concerning the placement of stops prompted me to take a look at Tesla's charts. Like a few other stocks that have benefitted from a still-speculative, bullish change in their “story”  --Facebook and Best Buy come to mind – TSLA launched into a parabola that very quickly discounted the best of all possible worlds. Tuesday’s high overshot, by a marginal 17 cents, a 62.20 rally target (see inset) that had been nine days in coming. I’d have advised some covered writes up there if  I'd been tracking TSLA at the time. The correction since is ‘impulsively’ bearish, but it should reverse from exactly 55.46 if Tesla is about to get revved up for another charge. However, a two-day close below 55.46, or an intraday print more than 25 cents below it, would imply more downside to at least 52.72 -- and also an end to TSLA mania.  From that point forward, a more measured consolidation near, in and around 52.72 would be likely. ________ UPDATE (10:55 a.m. EDT): This morning's quite vicious short-squeeze -- we'll assume it was a blowoff -- has come from a low at 55.71 that lay just 25 cents from the midpoint Hidden Pivot noted above.  I don't know how many cars Tesla will need to sell to vindicate the $70.48 peak of this morning's hysteria, but it seems a good bet that that threshold won't be reached for many years.  _______ UPDATE (1:34 p.m.):  The short squeeze has gotten second wind and targets 96.08.  A two-day close above that number would indicate...128.46. _______ UPDATE: I'm revising those targets significantly downward to, respectively, 86.72 and 104.44, since the original numbers appear to have been erroneous.