Don't short Tesla Inc (TSLA) stock today - here's what to do instead

Companies occasionally hit watershed moments – when the next few hours, and next big announcement, can determine the trajectory of its stock price for years to come.

It certainly feels like that’s where Tesla (Nasdaq: TSLA) is today. The company is set to report its Q1 financial results for the 2024 financial year later today – and it’s certainly ‘interesting times’ for the company, as the old Chinese curse goes.

The bad news at Tesla

At the start of this year, Tesla’s stock price opened at a magnificent $250.08 stock price. Today, it’s down to hovering at around $140.50, with a low of $138.80 yesterday. Tesla’s stock has dropped more than 40% in the year to date – and almost 10% in just the past week alone.

The reasons for this are myriad. Confusion surrounding Tesla’s new ‘robotaxi’, preceded by the company’s disastrous Cybertruck, raised eyebrows. And earlier this month, the company announced that it was conducting a brutal round of layoffs – some 14,000 people, or roughly 10% of their entire company. There certainly seemed to be blood in the water.  

As if that weren’t enough, the company’s vehicle sales volumes have dropped significantly. According to Tesla themselves, this was partially due to the early phase of the production ramp of the updated Model 3 at our Fremont factory and factory shutdowns resulting from shipping diversions caused by the Red Sea conflict and even “an arson attack at Gigafactory Berlin”.¹

The technical analysis of Tesla

Invezz analyst Ritesh A. sums up Tesla’s chart vital signs:

Not so fast

But things are never that simple – not when it’s Tesla we’re talking about. As Invezz analyst Ritesh A. points out:

And there is certainly a precedent for this. If there’s any CEO that is likely to rock the boat with an out-of-left-field announcement while on stage or on X/Twitter, it’s Elon Musk. With a canny eye on the share price, of course. And, currently, what does Tesla have to lose from a sudden bit of significant news?

A trading strategy for Tesla today

But that is, of course, highly unpredictable. It’s just as likely that we won’t get any entertainment with our financial results today. So, what’s a trader to do?

Once again, Ritesh A. has an answer:

Want to see exactly how Ritesh A. is doing it? Visit today’s Signals post on Tesla from him: https://invezz.com/p/signals/2024/04/23/long-tesla-may-17-150-call-option-contrarian-call-going-into-earnings/

Sources:

¹ Tesla, 2024.