TESLA Short Squeeze incoming after bounce from 5-year resist
Actualizado
See investment thesis below. Looking forward to hear your thoughts and views! Also from people that have shorted the stock. I was short as well until the 180-200$ range where I changed my position. I am long Tesla now with more than 50% of my net worth as I truly believe in this company.
Tesla has been recently targeted by numerous wall street analyst that have pushed the price down supported by negative media coverage.
Some examples:
- Media portrays mainly negative scenario (Bear case of $10 by Morgan Stanley). However, only highlighting that figure, while the that scenario has a very low probability and their overall stock recommendation is significantly higher.
- Extremely biased portraying of risk fire of the Tesla Car (every car burned is huge news while the number of electric/Tesla cars is in no proportion to normal cars that are burned). If media would show those the internet would die from the number of car burns (170k per year in US along). While only 3 car burns by Tesla.
Short Squeeze incoming
The main volume that has been pushing down the price are the short-sellers that are betting on this (fueled by negative news). However, they have increased their highest stake 21% short interest to 25% short interest in a period that the stock was at 5-year low (175-180$). Those shorts are going to start a short squeeze similar as a few years ago.
What are the similarities
- Both cases there was a huge short interest
- Both cases the weekly RSI was oversold
- In the previous short squeeze the share price went up 190$
Upside potential:
- Improvement of the Tesla narrative in the Media
- Ambassadors of Tesla pushing more sales (many of the Tesla car-owners buy share as they truly believe in the product).
- Tesla spends nothing on advertisement and still can't keep up with demand. There products are superiors as they can re-invest the 5-10% marketing budget in a better product
- Autonomous car way ahead of peers (this is not baked into the valuation as it doesn't generate yet superior volume)
- China (largest EV market) is going to bring Tesla to the next stage. The product is now selling 13k cheaper (mainly import tariff) with potential subsidy to increase further (in the past imported cars from US, while competitor cars have lost half their subsidy). Therefore the prices of Tesla have improved 15-20k compared to historic prices. This is going to be a game changer. The greatest thing about this!?
>>>> The profit margin will improve (cheaper production / no shipping / tariffs alone were enough to cover price drop)
>>>> Cash flow will improve (in the past cars would hold-up long period of time the inventory capital while shipping this is reduced significantly and pre-orders in China will be another boost of cashflows
Tesla has been recently targeted by numerous wall street analyst that have pushed the price down supported by negative media coverage.
Some examples:
- Media portrays mainly negative scenario (Bear case of $10 by Morgan Stanley). However, only highlighting that figure, while the that scenario has a very low probability and their overall stock recommendation is significantly higher.
- Extremely biased portraying of risk fire of the Tesla Car (every car burned is huge news while the number of electric/Tesla cars is in no proportion to normal cars that are burned). If media would show those the internet would die from the number of car burns (170k per year in US along). While only 3 car burns by Tesla.
Short Squeeze incoming
The main volume that has been pushing down the price are the short-sellers that are betting on this (fueled by negative news). However, they have increased their highest stake 21% short interest to 25% short interest in a period that the stock was at 5-year low (175-180$). Those shorts are going to start a short squeeze similar as a few years ago.
What are the similarities
- Both cases there was a huge short interest
- Both cases the weekly RSI was oversold
- In the previous short squeeze the share price went up 190$
Upside potential:
- Improvement of the Tesla narrative in the Media
- Ambassadors of Tesla pushing more sales (many of the Tesla car-owners buy share as they truly believe in the product).
- Tesla spends nothing on advertisement and still can't keep up with demand. There products are superiors as they can re-invest the 5-10% marketing budget in a better product
- Autonomous car way ahead of peers (this is not baked into the valuation as it doesn't generate yet superior volume)
- China (largest EV market) is going to bring Tesla to the next stage. The product is now selling 13k cheaper (mainly import tariff) with potential subsidy to increase further (in the past imported cars from US, while competitor cars have lost half their subsidy). Therefore the prices of Tesla have improved 15-20k compared to historic prices. This is going to be a game changer. The greatest thing about this!?
>>>> The profit margin will improve (cheaper production / no shipping / tariffs alone were enough to cover price drop)
>>>> Cash flow will improve (in the past cars would hold-up long period of time the inventory capital while shipping this is reduced significantly and pre-orders in China will be another boost of cashflows
Operación activa
It seems that we have finally crossed the 50 day MA at price 226 at daily close. Until now it had always closed below that 50 day average. Trade active!! Long at @227-230
Initial target 250, but could reach at least 270 next average
Nota
Trade active today, we are up already 7%. Did anybody long?Further short squeeze is expected as 30%+ is short!!!
~5-10% of those shorts are opened below the price of 240, these people will soon be desperate to close or forced due to margin calls.
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