Tesla's Bull Market Viewed through Crude Oil Prices
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Thanks to Ivan Labrie (IvanLabrie) here on TradingView for putting up this graph this morning in the Key Hidden Levels chat room because it really highlights how Tesla has kept pushing higher relative to crude oil. Of course we are all watching crude oil for a bottom down here somewhere near this $30-$20 range, so comparisons going forward might be very difficult. However, if you were able to have held an equal amount of crude oil short positions adjusted to each day's close, your P&L would like like this for your position in TSLA with multiple corrections of 30% to shake out the weak holders and the profit takers.
Long term winners have many, if not 10 or more corrections of 25%-35% during their growth phases. Look to the historic charts of MSFT, DELL, CSCO, AMZN, NKE, and so on to see exactly what I mean. If you put your graph into log-mode and not arithmetic scale, then you will see the corrections in equivalent size. It is easy to lose perspective when you only look at "arithmetic charts", where the price scale is 1 point increments instead of 1% increments in a log-scale chart.
You can see TSLA is up to its trend the runs across the peaks from the past couple of years and that doesn't mean it will stop but it shows you how powerful this trend has been. 1755% is a tremendous rally and for anyone creative enough and clever enough to have kept this position on during this entire rally, well, they should be congratulated.
Keep thinking creatively.
Tim
11:08AM EST January 19, 2016 TSLA/USOIL @ 7.20 TSLA @ 209.32, USOIL @ 29.09
Long term winners have many, if not 10 or more corrections of 25%-35% during their growth phases. Look to the historic charts of MSFT, DELL, CSCO, AMZN, NKE, and so on to see exactly what I mean. If you put your graph into log-mode and not arithmetic scale, then you will see the corrections in equivalent size. It is easy to lose perspective when you only look at "arithmetic charts", where the price scale is 1 point increments instead of 1% increments in a log-scale chart.
You can see TSLA is up to its trend the runs across the peaks from the past couple of years and that doesn't mean it will stop but it shows you how powerful this trend has been. 1755% is a tremendous rally and for anyone creative enough and clever enough to have kept this position on during this entire rally, well, they should be congratulated.
Keep thinking creatively.
Tim
11:08AM EST January 19, 2016 TSLA/USOIL @ 7.20 TSLA @ 209.32, USOIL @ 29.09
Note
Really nice reaction down to 5.5 from 7.3 in the two weeks since posting this pattern. Today's range is monstrous with crude down 6% and TSLA up 4%. When you find a trend that you believe in, the best thing you can see is a correction to get involved. I hope you viewed the drop in TSLA and the rally in crude oil as an opportunity. I see crude working higher over time and I also see TSLA doing the same.Note
More downside to 5.25 last and now a 30% correction off of the high. I'm getting plenty of comments from people telling me that Tesla is down because crude oil is down. People know I have been a Tesla champion and almost seem happy that Tesla is down. I'm not sure if I am reading their intentions correctly, so I'll ask next time. But here's what I see: Tesla is a luxury car that is independent of oil prices. If oil goes to near zero, people will still want to buy a Tesla because it is an amazing, beautiful car. I have driven the P85-D and it is absolutely jaw-dropping amazing. So, given how Model-S is selling more than other luxury models in their peer group, I think it is fair to put Tesla in with auto manufacturers, high technology, software and other categories. Also, people are waiting for the Model-X and they aren't producing them quickly at all. I think there are about 15,000-20,000 vehicles in their backlog, but production is very slow. I think this is why the current earnings report will be poor. The rest of the world might be buying the Model-S because it is available. The competition for the next series in the $35,000 range (Model 3) is getting quite strong with the Chevy Bolt, eGolf, etc... but Tesla is vulnerable ahead of the next earnings report and the short sellers have a free ticket to drive the price down in this environment. They (short sellers) have been waiting a long time to get a move down like this, so I hope they take advantage of it. I prefer to buy TSLA only since I am cheering for them and so far that has worked just fine for me. Keep TSLA on your watch list and stay tuned: I think next week will be very interesting. The valuation on TSLA gets better and better with every point down it goes. $160 is a bargain, but it could certainly go to $140 along the way, before a decent rebound. The earnings call will make TSLA move +50 or -50. Stay tuned.Note
32% off of the high now and right down to the lower trendline already. It takes guts to buy. Articles posted today on SeekingAlpha said there are concerns about "margin loans" Elon Musk has taken on to buy shares of TSLA. But the amount borrowed against the amount of stock he owns is far beyond and "margin call" level. If TSLA fell to the margin call level, AAPL would be able to scoop up TSLA for such a modest amount it would be under $10 billion in valuation.
Note
Nice rebound from 4.93 to 5.5+ or a 13% Rally from the last post.
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