Tesla Calls Hot Amid Pick-up Truck Buzz

Analysts, on the other hand, are still cautious on the electric automaker

by Lillian Currens

Published on Nov 25, 2019 at 11:55 AM
Updated on Nov 25, 2019 at 12:04 PM

The shares of Tesla Inc (NASDAQ:TSLA) have turned themselves around since Friday's disastrous unveiling of its new electric pick-up truck, the Cybertruck. In fact, the stock is up 2.3% at $340.72 at last check. 

Options are running slightly hotter than usual today. So far 103,000 calls and 92,000 puts have crossed the tape. A massive amount of activity is taking place at the weekly 11/29 350-strike call, where contracts are being bought to open for a volume weighted average price (VWAP) of $2.49. This means these traders are expecting TSLA to rally north of $352.49 (strike plus premium paid) -- home to its pre-bear-gap levels -- by the time these contracts expire this Friday. 

Bullish interest in the options pits has been the norm for Tesla, though. The electric automaker just showed up on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest weekly options volume within the past two weeks, with names highlighted in yellow new to the list. In fact, during the past 10 days, 544,674 weekly calls and 397,831 puts have been traded. 

Most Active Options Nov 25

Data on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) tells a similar story. Here, the equity sports a 10-day call/put volume ratio of 1.42, that ranks 96% higher than all other readings from the last year. This suggests a much bigger-than-usual appetite for bullish bets of late. 

Sentiment among the brokerage bunch, on the other hand, hasn't been so sunny. In fact, 14 of the 20 in coverage consider TSLA a "hold" or worse. Plus, the consensus 12-month target price of $276.85 is an 18% discount to current levels. 

Prior to last week's bear gap, TSLA was climbing up the charts, thanks to a post-earnings surge notched in late October, with support from its ascending 10-day moving average. The stock sputtered out just below the $360 region, however, causing the shares to slice through the aforementioned trendline. The 20-day moving average has emerged as support however, helping Tesla tread atop its year-to-date breakeven mark. 

TSLA Chart Nov 25

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