There's a lot of pessimism around TSLA to be unwound
No stock has had as a resounding close to 2019 as Tesla Inc (NASDAQ:TSLA). Today looks to be more of the same, with the stock up 0.4% to trade at $427.11 -- and earlier hitting a new record high of $429.99 out of the gate -- after Wedbush hiked its price target by $100 to $370. And if that's not enough, the analyst in coverage predicts the company "comfortably" hitting its fiscal-year delivery forecast.
Tesla stock is up 90% in the last three months, and is gunning for its sixth straight record close. The shares gapped higher in late October in the wake of a surprise earnings beat, and since then, their 30-day moving average contained any pullbacks.
There remains a great deal of pessimism surrounding Elon Musk's Tesla. For starters, 15 of the 21 brokerages in coverage rate TSLA a "hold" or worse, and the consensus 12-month price target of $298.33 is a discount to its Christmas Eve closing perch of $425.25. Some short sellers are heading for the hills, with short interest down almost 10% in the two most recent reporting periods. However, this still accounts for a healthy 21% of the security's total available float.
For the past month, call traders have targeted TSLA with renewed fervor. Data on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows the equity with a 10-day call/put volume ratio of 1.65, that ranks 97% higher than all other readings from the last year. This suggests a much bigger-than-usual appetite for bullish bets of late.