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Tesla Is Overweight, Time To Short It

Tesla

First, let me apologize if, given that this is inauguration day, you were expecting me to write another piece about investing under President Trump. It is not that I don’t believe that the fossil fuel industry will do well under the new administration. That seems to be rather obvious, but has also been said many times, and if you aren’t positioned for that now it is a little late. Given that dynamic and my background as a trader rather than a long term investor I would rather focus on a short term trading opportunity than attempt to look forward four years. With that in mind, the chart is now suggesting that it is a good time to once again short TSLA.

(Click to enlarge)

Taking that position is always a risky thing to do for a couple of reasons. First and foremost Tesla is an innovative, disruptive company that makes cars that are, according to almost all reports, superb, and may well be the future of the automotive industry. There are legitimate questions about when they can show a consistent profit on a GAAP basis, but they certainly look to have a future. Second, many investors in the company see it more as a religion than a rational investment and flock back to the stock on any sign of weakness.

That said, though, there does seem to be a point at which others begin to feel that the stock is overvalued and proximity to the fifty two week high at around $270 and the fact that the strong run up since the beginning of December ran out of…




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