TESLA: Q3 report coming - how do we trade it?

TESLA: Q3 report coming - how do we trade it?

2020-10-19 • Dikemaskini

In the long-term, Tesla’s stock is recovering. It fell from the highs of $500 in August and never got back up there since. Through the course of recent months, the area of $463 has been serving as resistance. Now, Wednesday will be the day when Tesla reports its Q3 performance (21:30 MT time). Will it fly above $500 or fall to $400 this time?

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The problem with this stock is that it’s really overheated. Its Price-to-Earnings ratio is really high. That is partially for a reason that investors price in their high expectations of Tesla’s performance in the years to come into the current price. In addition to that, its previous report significantly outperformed the forecast so now investors are waiting for even stronger output. In simple words, to stay at those heights where it is, Tesla has to beat itself. Most investors abstain from recommending buy or sell and agree that holding might be a wiser scenario – primarily because Tesla is just too unpredictable. Therefore, if you want to follow a cautious approach, that may be the wisest strategy. Look for $410 as a bottom to pick up this stock if it drops on the underperformance of Q3 results. Otherwise, if it does well, check for crossing the resistance area above $460 – that would be an indicator to possibly catch the bullish wave.

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