Tesla Motors Inc (TSLA) Continues to Slide on Goldman Sachs Downgrade

Tesla Motors Inc (TSLA) is continuing its slide downward, but the stock could soon meet up with technical support

Oct 7, 2016 at 2:58 PM
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Tesla Motors Inc (NASDAQ:TSLA) is extending yesterday's slide after a critical Goldman Sachs note that cut the electric car maker to "neutral" from "buy," and slashed its price target to $185 from $240. Goldman Sachs cautioned against the negative effects that could result from a delayed Model 3 launch, and cited Elon Musk's M&A ventures as an "incremental risk" to TSLA. Today, the stock is down 2.1% at $196.71, and weekly option players are making last-minute bets.

TSLA options are trading at 1.6 times their usual intraday rate, and puts are outnumbering calls, with 51,000 put contracts crossing the tape, compared to 45,000 call options. Eight of today's 10 most active options are the 10/7 weekly options, led by the newly-in-the-money 10/7 197.50-strike put.

Despite the stock's analyst-related dip today, TSLA could be close to meeting up with support. The $190-$195 level -- which represents a 61.8% Fibonacci retracement of TSLA's February lows to its April highs -- has acted as a floor for the shares since late June.

Nevertheless, shorts are betting on more downside for TSLA. Short interest on the electric automaker was up 6.4% over the last reporting period, and now accounts for nearly a quarter of Tesla Motors Inc's float -- an accumulation of bearish bets that would take nearly seven trading days to cover, at the stock's average daily volume.

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