Tesla Hasn’t Done This in Years
Once upon a time, Tesla was a fast-moving growth stock. But those days could be in the rearview mirror.
This chart highlights Bollinger Band Width and Historical Volatility on the electric car maker.
Notice how Band Width is under 8 percent – its tightest since February 2018.
Historical volatility has dipped back to May 2020 levels as TSLA pushed against previous highs before breaking out. Separately, TradeStation data shows that implied volatility on the company’s options is near 45 percent, about half its reading in mid-May.
Taking a longer look back, it might elicit a sense of Déjà vu because TSLA did something similar in 2013 and early 2014. That time, it broke out and rallied about 550 percent over roughly 47 weeks. This time around (starting in late 2019), the shares ran 1,100 percent over 53 weeks.
Prices proceeded to consolidate for 5-1/2 years after that initial run. While it can be frustrating, some stocks simply behave this way (especially growth stocks): They price in years of growth in a few quarters and then drift – confounding bulls and bears alike.
Given the similar price action between late 2019 and early 2021, this could be happening again in TSLA. It may suggest that TSLA’s agonizingly price range is the new normal.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
This chart highlights Bollinger Band Width and Historical Volatility on the electric car maker.
Notice how Band Width is under 8 percent – its tightest since February 2018.
Historical volatility has dipped back to May 2020 levels as TSLA pushed against previous highs before breaking out. Separately, TradeStation data shows that implied volatility on the company’s options is near 45 percent, about half its reading in mid-May.
Taking a longer look back, it might elicit a sense of Déjà vu because TSLA did something similar in 2013 and early 2014. That time, it broke out and rallied about 550 percent over roughly 47 weeks. This time around (starting in late 2019), the shares ran 1,100 percent over 53 weeks.
Prices proceeded to consolidate for 5-1/2 years after that initial run. While it can be frustrating, some stocks simply behave this way (especially growth stocks): They price in years of growth in a few quarters and then drift – confounding bulls and bears alike.
Given the similar price action between late 2019 and early 2021, this could be happening again in TSLA. It may suggest that TSLA’s agonizingly price range is the new normal.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
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