In the Sept. 1 issue of Stock Surge Daily, I alerted you to a new trade I was taking on Tesla, Inc. (TSLA) stock.
Back then, the stock was checking all of my boxes for a potential bullish trade.
It was just starting to break out of a textbook “ascending triangle” consolidation pattern.
The pullbacks were becoming shallower and shallower…
Volume was decreasing at the same time, which meant the selling was becoming exhausted…
And the moving averages had turned upwards.
In other words, the short-, medium- and long-term trends were all pointing higher.
And fundamentally, the company was seeing huge growth in both sales and earnings.
All of this created a compelling case for a long trade in TSLA.
This is what the chart looked like back then…
It doesn’t get much more textbook than that – ascending triangle pattern, shallower dips, decreasing volume…
This is exactly what I like to see in a chart.
And as noted, the fundamentals were also good.
Tesla has seen huge growth in both sales and earnings in each of the last four quarters.
About a month later, in the Sept. 28 issue, I gave readers a second entry point.
Tesla shares had again consolidated and began moving out of a small base on high volume.
From there, the stock never went against us.
And as of Monday morning, we had an open gain of almost 30% from our averaged entry point.
If you took the trade, well done!
You made a bigger return in the last two months than the market has done all year.
But after such a strong move, I suggest exiting here to collect a nice profit.
At the least, sell a piece of it, and raise your stop loss.
And if you didn’t buy, don’t chase it. I would not buy Tesla here.
Price is extended, and the stock could easily retrace when investors begin taking profits.
If the stock begins to set up again, I’ll let you know.
Otherwise, let’s not get greedy at these levels.
Embrace the Surge,
Ross Givens
Editor, Stock Surge Daily
