DailyPlay – Opening Trade (TSLA) – October 22, 2024

TSLA Bearish Opening Trade Signal

Investment Rationale

TSLA recently broke down from its trading range with strong momentum an underperforming the S&P 500, providing an opportunity for further downside to our $200 target. After a disappointing Robotaxi reveal, news of Waymo’s expansion, and increased competition in the EV space, TSLA’s prospects are significantly dimmed and its 70x forward earnings poses a significant risk in its valuation.

TSLA – Daily

Trade Details

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish Debit Spread

Details: Buy to Open 3 TSLA Nov 15 $217.50/$195 Put Vertical Spreads @ $7.88 Debit per Contract.

Total Risk: This trade has a max risk of $2,364 (3 Contracts x $788) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $788 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is expected to break below recent support.

1M/6M Trends: Bearish/Neutral

Relative Strength: 10/10

OptionsPlay Score: 119

Stop Loss: @ $3.94 (50% loss of premium)

View TSLA Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Monday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View TSLA Trade