Tesla Motors Inc (NASDAQ:TSLA): Creating Short Position Before Earnings?
It is going to be a big challenging day for Tesla Motors Inc(NASDAQ:TSLA) as the company is all set to report its second quarter earnings today after the market hours. After reporting its maiden quarterly profit in the first quarter, analysts are estimating the company to return to loss.
Shares of the company have already jumped over 300% so far this year with most of gains coming in past three-month post earnings helped by surprised profit which made trader to cover their short positions and this created panic buying for the stock.
From the technical prospective, the stock looks oversold with the current market price of $135 is 150% higher from its 200-day moving average.
William Koldus, founder of Koldus Contrarian Investments believes that shorting TSLA could be a good bet and said “spectacularly overbought” Koldus says in a post on Seeking Alpha. Some 24% of Tesla shares are shorted, according to FactSet.
There is no doubt that TSLA has shown vertical rise, which is often a not good sign. But, shorting the stock which is trading at an all time is a risky trading bet. But, it’s best to buy out of the money put ($130 or $125), if investors are bearish on the stock.
Analysts are estimating the company to report a loss of 30 cents a share, while revenue is projected to fall by 30% sequentially from $561.8 million in sales.
There are a number of reasons Tesla could see an about-face, including a slowdown in its sale of regulatory credits to other automakers, the costs of expanding in Europe and the absence of last quarter’s boost from the early payoff of its government loan.
Shares of TSLA are down 5.70% at $134.08.
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