Tesla Stock Stalls After Model 3 Price Cut

TSLA is set to breach a trendline today

Managing Editor
Dec 24, 2018 at 9:18 AM
facebook twitter linkedin

The shares of Tesla Inc (NASDAQ:TSLA) are down 2.6% in electronic trading today, after it was reported the company had cut the price of its Model 3 vehicle in China. This is the third time in the past two months Tesla has reduced the price of the vehicle. 

Tesla stock started December off strong in the wake of a big bull note. Last week, however, was the electric car name's worst weekly drop since Sept. 7. On the charts, TSLA is now set to open around $311, an area home to its pre-bear-gap levels from early October and the shares' year-to-date breakeven level. The stock is also pacing for a fall below the 200-day moving average.

Short sellers have been heading for the exits lately. Short interest fell 8.6% in the last two reporting periods to 27.36 million shares, the lowest amount since October 2017. However, this still represents a hefty 21.5% of TSLA's total available float. 

In the options pits puts have been popular lately. Looking at data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio sits at 1.12, showing a distinct preference for put buying over call buying during the past two weeks. What's more, this level of put buying relative to call buying is highly unusual, and in fact this reading ranks in the 94th annual percentile.


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Best stocks for October and worst stocks for October


Special Offers from Schaeffer's Trading Partners