TSLA rallies up 15% on Thursday despite being the MOST shorted stock on NASDAQ. Short sells report shows that the short sellers are still holding on to their paper loss. Currently about 25% of TSLA float are shorts.
It is nice to play with the idea that if those 25% starts to cover their shorts, it could cause TSLA to go up sky high to beyond $400. While that is a good notion, we should not get too caught up in extreme situation and still base our trades on what we currently have. Remember that Bill Ackman held on to Herbalife Shorts for years!
We have 2 possible situation:
Situation 1) Price will hang around 340-350 for a while before short decide to give up. How long this will last we do not know, thus you should have some holding power and aim for mid term. When comes to battle of endurance between long and shorts, it usually favor the longs as they are not subjected to short premiums.
Situation 2) Short decided hold on and will cause TSLA to drop back 300-315 range. However as long as bulls are able to hold this area well, short will eventually cover as the premiums mounts up over time.
Which ever trade you decide to go for, always keep in mind that there is no "sure win" trade. Do not overexpose yourself. Take care of your risk. Your Profit will follows :)
Have a good week ahead all!
It is nice to play with the idea that if those 25% starts to cover their shorts, it could cause TSLA to go up sky high to beyond $400. While that is a good notion, we should not get too caught up in extreme situation and still base our trades on what we currently have. Remember that Bill Ackman held on to Herbalife Shorts for years!
We have 2 possible situation:
Situation 1) Price will hang around 340-350 for a while before short decide to give up. How long this will last we do not know, thus you should have some holding power and aim for mid term. When comes to battle of endurance between long and shorts, it usually favor the longs as they are not subjected to short premiums.
Situation 2) Short decided hold on and will cause TSLA to drop back 300-315 range. However as long as bulls are able to hold this area well, short will eventually cover as the premiums mounts up over time.
Which ever trade you decide to go for, always keep in mind that there is no "sure win" trade. Do not overexpose yourself. Take care of your risk. Your Profit will follows :)
Have a good week ahead all!