SCOTT WELSH’S ANATOMY OF A GREAT TRADE
Anatomy of a Great Trade: TSLA
Do high-flying companies ever go on sale?
If they’re truly high-flyers, the answer is: not very often.
But sometimes they do.
And Tesla (TSLA) is an example.
A very lucrative example.
Back in 2019, TSLA got some bad news (like it always seems to get.)
Of course, it was bad news of its own making (TSLA is constantly doing that, too.)
In 2019, the company had seen its deliveries decline and had missed on its sales and earnings numbers.
It was in a bad way.
Here’s the chart from back then:
In June, the price came down near the lower Band of a long-term moving average (the 800 SMA.)
TSLA was definitely on sale. (Unless it was going to zero.)
What happened?
It went from $12 down at the lower Band up to “fair value” $19 a few months later. That’s a quick 50% move.
But if you loved TSLA and used the move to the lower Band as your entry point for a buy-and-hold position, a buy at $12 would now be at $171.
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