Will Bullish Analysts Turn on Tesla Motors, Inc. (TSLA)?

Tesla Motors Inc (TSLA) will soon have to contend with the new Chevy Bolt

by Alex Eppstein

Published on Jan 12, 2015 at 1:45 PM
Updated on Apr 20, 2015 at 5:32 PM

Following a meteoric rise to a record high of $291.42 in early September, Tesla Motors Inc (NASDAQ:TSLA) has cooled off considerably. The shares are down 3.1% today to trade at $200.30, meaning they've lost nearly one-third of their value since touching the aforementioned peak. Amid this downtrend, options traders have taken notice.

During the last two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open more TSLA puts than calls. The resultant 10-day put/call volume ratio across those exchanges is 1.18, which sits just 4 percentage points from a 12-month high. In other words, traders have displayed a healthier-than-usual appetite for bearish bets over bullish of late.

On a similar note, TSLA's Schaeffer's put/call open interest ratio (SOIR) registers at 1.52. This suggests short-term traders have shown a distinct preference for puts over calls, among options with a shelf-life of three months or less.

Negativity extends beyond the options pits, too. Short interest on TSLA grew nearly 6% during the two most recent reporting periods, and nearly one-quarter of the stock's float is sold short at present. It would take approximately four sessions to buy back all of these short positions, given the equity's typical daily trading volumes.

Also, it appears competition is heating up for the electric car maker, as General Motors Company (NYSE:GM) is introducing the new Chevy Bolt -- which boasts a 200-mile single-charge range, and a relatively modest $30,000 price tag -- at this week's Detroit Auto Show. For comparison's sake, TSLA's Model S sedan starts at roughly $70,000.

If TSLA continues to struggle, the stock could be at risk of downgrades or price-target cuts. Currently, 62% of analysts rate Tesla Motors Inc (NASDAQ:TSLA) a "buy" or better, with an ambitious average 12-month price target of $273.21. Any negative notes from this bullish group could compound the stock's technical troubles.

Weekly Chart of TSLA since January 2014


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