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Electrifying Tesla

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TSLA short-sellers no doubt feel that they have stuck their fingers into a light socket, or perhaps I should say they have been hot-wired to a charging station. Since last June's low, the value of TSLA stock has increased about four-and-a-half times. This week it advanced almost +50%, and today it hit another all-time high. It isn't hard to figure out where the short squeeze began -- 390 has held for about three years, and the pain must have started in earnest when price moved above that level.


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I'm not personally a TSLA fan. To me it is a "feel good" stock that is priced without any regard for solid fundamentals. That doesn't mean that there isn't some substance here, or that it can't eventually become a solid company, but it is reported that the current market cap is approaching the combined market cap of five major auto manufacturers. And from a technical point of view, price is worse than parabolic -- it is vertical! IMHO this will not end well, but don't ask me when it will crash -- it was reported the current shorts are about 20% of shares outstanding, so more squeezing could easily result in still higher prices. When it does finally start back down, technically, there is good horizontal support at 390, but at this point I can't make a case for anything higher than that.

Happy Charting! - Carl


Technical Analysis is a windsock, not a crystal ball.


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Carl Swenlin
About the author: is a veteran technical analyst who has been actively engaged in market analysis since 1981. A pioneer in the creation of online technical resources, he was president and founder of DecisionPoint.com, one of the premier market timing and technical analysis websites on the web. DecisionPoint specializes in stock market indicators and charting. Since DecisionPoint merged with StockCharts.com in 2013, Carl has served a consulting technical analyst and blog contributor. Learn More
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