Tesla (TSLA) builds whisper-quiet cars but its shareholders are accustomed to bumpy rides. Shares have gone up by 37% over the last year but the downdrafts have been withering. Twice in the last twelve months Tesla shares have dropped by more than 30% only to claw their way back to record highs.
Back in August Zor Capital’s Joe Fahmy made Tesla his top pick to possibly double over the next year. At the time TSLA was trading at $243. Since then the shares have been predictably unpredictable, rising 20% then giving back most of those gains. In the attached clip Fahmy says he’s sticking with his pick, even if there are only scant profits left to take on the trade.
“Nothing has changed since last time I was here” Fahmy says rather coolly in the attached clip. Pointing at that it’s common for stocks to pullback to previous resistance points after breaking out on the chart Fahmy says some consolidation makes sense here.
For Tesla the $240 to $250 area is important as far as chartists are concerned. Not only is that where the shares topped out last spring but it’s also Fahmy’s breakout area. Should support fail here a rather nasty head and shoulders formation could be in place.
Bears would love nothing better than to take a shot at the short side on Tesla. Fahmy is counting on them getting it wrong again. Despite the big drop the number of shares sold short outstanding was still in the low 20 million area as of the most recent data. In the past that number has been closer to 30 million before enough bearish charge was in place for Tesla to move appreciably higher. Until then Fahmy says keep picking away on the long side if you choose, it all depends on your personal risk tolerance.
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