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Tesla in 2020 - Why we still love this top-performing Stock!

Reviewing a very lucrative year for the largest EV company in the world, plus our outlook for 2021.

By Chris Lee & Robert Turkin

 

Tesla: the highly innovative, highly controversial American electric carmaker led by equally controversial founder and CEO Elon Musk has seen a massive 730+% gain in its stock price in 2020—surged by "steady profitability, newly bullish analysts outlooks, and outsized demand from retail investors— leaving short sellers with a massive loss of $38 Billion.By comparison the next biggest short seller loss was Apple with just under $7 Billion”.


Tesla this past year saw not only a 5-for-1 stock split which sparked new investor interest, but also inclusion onto the S&P500 index, fueling it’s recent leg up bringing the stock above $800 from it’s split price of $446 just five months prior. The company added over $550 Billion to its market cap in 2020 alone. “That's more than four times greater than the combined valuation of Ford, General Motors, and Fiat Chrysler”.

 

Tesla Split History Adjusted:
Growth of $10,000 without Dividends Adjusted
Tesla Stock Price Split History Adjusted
Tesla Stock Price Split History Adjusted 2
(Editors Note: As of 1/8/21, $TSLA recently experienced consecutive 8+% daily gains this past week,
rocketing the stock price to a new ATH of $884.49 and closing at approximately +20% in just this past week.)

 

  Our outlook into Early 2021: Reviewing a recently identified technical pattern

 When trading options it's important to be adaptable— to follow the trend, the news, and the sentiment. Attempting to counteract the trend can be your downfall. Based off this recently identified technical pattern shown on the below chart, we are very eager to see Tesla's performance this upcoming week, as it looks to follow trend to the upside and continue where its amazing run last week left off. With that being said, one must be able to adjust quickly when price and sentiment are not acting in their favor. Warren Buffet has famously said “be fearful when others are greedy, and greedy when others are fearful".

 

Tesla Stock Chart - Parabolic Step Pattern - January 2021

In such a tremendous bull run, it is only fair to see why many traders are eager to short Tesla in anticipation of a price correction. The higher and higher Tesla's stock valuation goes, the more and more we see retail traders attempting to "time the top" and enter into short positions on Tesla. While the strategy for trading Put Options at the top of an upcoming pullback is a no brainer, it seems many would “rather be right than make money”. Jovan, one of our distinguished analysts, recently shared his chart analysis on Tesla's parabolic movement last week. This trading pattern, known as a Parabolic Curve Step Pattern, has been seen on Tesla once before last January 2019. If history proves true again, this chart pattern indicates from a technical perspective that we can see Tesla easily and quickly accelerate above the $1000 stock valuation before collapse. 

 

At J&M Option Trading, we are a social community with over 500 traders of all levels. We use this shared trading experience teach technical analysis, how to initiate ideal trade entries and exits, risk management, and a host of other skills and strategies designed to help you rise above the retail trader. While many traders allow emotions to dictate their account performance, we instead educate our members to create consistent and sustainable profitability day over day, month over month.

 

Tesla’s growth is showing no signs of slowing down in 2021, and remains one our consistently favorite stocks to both invest and trade. Join us now and start learning the skills and concepts that kept us profitable during one of the most volatile years in market history, and allowed us to maximize our profits from Tesla's continued bull run. See our Membership Plans and Courses for more information, or Contact Us if you have any questions about our community.