Tesla looks like bitcoin and there's one way to benefit, trader says $TSLA (via TradingNation)
A massive surge on Monday and Tuesday sent shares up nearly 50% over those two days, but a decline on Wednesday and pause on Thursday reduced those gains to 14% on the week., managing director of Ascent Wealth Partners, says the surprise surge could continue — and he uses an unconventional comparison to make the case.
"We're going to look at the hot story stock here — Tesla. An unbelievable run that rivals that parabolic move that we saw even in bitcoin last year and the year before that," Gordon said Thursday on CNBC's "Bitcoin went from less than $3,000 in mid-2017 to a peak above $20,000 by the end of that year. Tesla's charts have shown similar steep moves — shares are up 315% from a June low.
"We've seen a pretty strong — very strong — historic move up and a pretty subsequent, impressive pullback here. So, from about [$969] we've pulled back to $700 here," said Gordon. Tesla hit that record high on Tuesday and has since pulled back 24% to $735. Gordon now sees a potential bottom of $650 to $675 that could "act as a floor as Tesla is trying to gather itself to potentially make another run back up.""The only way I would be trading this stock is with defined risk strategies, specially within the options market. It's the only way.
To take advantage of a potential near-term move to the upside in Tesla, Gordon is paying $3 to buy the Feb. 14 800and selling the 820 call option against it. This is a bullish bet that Tesla will rally above $800, or up about 9% from current levels by the end of next week. Tesla was down more than 2% to $731.23 in Friday's premarket.
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