A Tough But Worthwhile Race

Shorting Tesla feels like a race against time, in some respects, as the super stock can explode higher at any moment with its charismatic CEO and cutting edge concept and brand. Still, even super stocks feature sharp corrections along the way, which is precisely what I am playing for at the moment. I have largely avoided shorting Tesla in recent years for what are likely the same reasons you are not seeing too many traders join me in this foray--They were burned badly by the hot stove of momentum to the upside. But, objectively speaking, when we observe the weekly chart for TSLA, below, there is no doubt the stock has been in some type of corrective or consolidation pattern for a good while now, with risk remaining lower given the action since pre-Labor Day 2014. Also note the potentially massive head and shoulders top (light blue lines). Even on a day like today, with the stock lagging other marquee issues, dip-buyers are still going to give it a go--Given their success in recent years it would be foolish not to think otherwise. Nonetheless, if they fail to make much progress this time around I suspect they will finally back away as they find out that momentum can cut both ways.