Elon Musk Warns Of Tesla Stock CRASH? Why Tesla Stock is Falling: Buy or Sell TSLA Stock?

by birtanpublished on September 12, 2020

Tesla tesla tesla what's happening we got a nice little 35 drop but now it looks like it's rebounding how convenient but is the rebound for real or is this a bad sign for the stock long term that's what we're going to talk about in this video

And also why i think tesla is one of the most important stocks in the stock market and a lot of what we're going to talk about today we talk about further in this free

Training there's a link in this video and down below in the description and comments it goes over our entire strategy that we use myself and most of our fallout members and we're up over 50 this year so we're

Doing pretty well and that's with managing our risk it's very easy very simple very effective if you want to learn more check out the training so the reason why tesla is so important when you're

Analyzing the market and why we keep doing videos about it is because it's a really good sentiment indicator and what do we know about markets markets are all about sentiment so markets move with either

Risk on or risk off risk on being people buying stocks because they have a higher risk tolerance they're willing to take on risk risk off is when they're selling their stocks and

Going into safer assets like bonds and what you got to realize about the stock market is that stocks mostly just move together it's very rare when the stock market is collapsing that you're gonna see some stock shooting up

Higher it doesn't work like that steve cohen the famous fund manager who gets in trouble with the law all the time with all his insider trading who the billions character bobby axelrod is

Based off of he's the one that said that a stock's price movement is based mostly off the market so 50 of that movement comes from the broader index 30 percent comes from its specific industry

So in tesla's case how are other tech companies moving not car companies because it's kind of in its own category with the tech guys and then 20 of the movement comes from the stock itself so for any stock if 50

Is according to the index then yes most stocks are going to be moving together which is why when you're trading or investing you always got to be aware of the overall trend you don't want to be buying when stocks are falling and you

Don't want to be selling when stocks are going higher unless you're taking profits of course and you can see this movement in tesla from where it started falling to where it's bouncing is very similar to the same movement in

The nasdaq itself drop down bounced so if you look at it that way really all risk assets move more or less together and tesla i think is a really good indicator of how much risk

The market wants to take on at least the retail market because we know there's two sides of the market right there's the retail guys so the robin hood investors and people with accounts of like td ameritrade things like that then

You have the institutional guys the big money what they call the smart money now i wouldn't say tesla is the best indicator for the institutions but for retail definitely because everyone loves the

Stock and every person if they're getting into the stock market they know something about whether they should be buying or selling tesla for some reason whether they actually have good information or not

They're looking at tesla so that's why when you see price action like this like what's going on here you can sort of use it to gauge what's the risk appetite of retail because if they're done with tesla and the stock is

Going to fall then we're likely going to see the same thing happen in the broader index because that means they're done with stocks in general so look out below now one of the best ways to gauge sentiment

On these stocks is based off events so stocks have certain events right they report earnings they issue dividends they release statements there's news that comes out all that type of stuff

And what you want to look at is how the price in the market reacts to that news because in stocks it's not the news itself or the fundamental data itself that's important at least with the way we trade what's important is people's

Reaction to it for example have you ever seen a company release positive earnings and then the stock price drops well the reason it's dropping may not be because the earnings are bad because they're positive right

They made money but it's because they weren't good enough to meet investors expectations so if the borrower was here even if their earnings are positive they may have fell right here so investors are going to dump the stock because of

That so it's all based off expectations so in my opinion the only way you're going to know if news is good or bad is depending on how the market reacts to it and that's what we call inflection points in the market so if

You take this piece of news and you look at the market and it rockets higher that might be a really good sign same thing like i was saying before if really positive news came out or at least you thought it's positive

And the stock tanks well then investors might be done with that stock so in tesla we had a few pieces of news that came out lately on the 31st the stock split happened right was it five for one

And what happened to the share price it jumped people were very excited bought in and again this is a whole retail thing because prices are cheaper they can buy more shares and they get excited and right after

That on the 1st tesla announced that they're going to sell 5 billion more worth of shares so you had two big pieces of information come out and what happened to the stock price well first it jumped and then it fell so

The way that it fell is not a good sign i would say that's bearish while investors initially reacted really positively they turned around and ended up selling now if you notice here if you compare this chart to

The nasdaq the nasdaq kept going up and went up on the 31st the first and the second then it finally turned around on the third tesla started turning around on the first had a bad close that day the

Second was pretty bad third pretty bad so in this case and it's not always going to work out like this but tesla was looking like a leading indicator which is what i was explaining before if you want to know

What's going to go on with the general market watch tesla so we don't know for sure what this means because we got to see the price action play out a little bit another thing that could have happened is that just the market was

Overbought because it definitely was that run was crazy and we haven't had a correction in a long time so it could have been the case that regardless of what news came out for tesla it was time to take a break so the

Sentiment analysis is not perfect you still got to mix it with other types of analysis and really if we're doing straight technical analysis here what happened tesla fell down to its

50-day moving average right here this orange gold line and then it bounced which is what you would expect it to do because these moving averages provide support and they aren't magic lines or anything it's just psychology

A lot of people are following these lines so when they see it hit they think it's a good value and they want to come in and you will usually see a bounce like this and you can see the same thing was

Mirrored in the nasdaq and the s p so what you really want to look for going forward is if it holds this bounce if at least consolidates within this range so what could happen

Going forward here is that tesla just moves up and down between this high right here which is around 500 and this point right here 328 and you'll see this moving average is going to keep moving up right because

These forward prices are higher so the average should move up and you might see the consolidation of tesla get smaller and smaller so you could see something that looks like this over time price rotating up and down up and down

And then what do we expect to happen whenever there's consolidation like this and compression in markets we expect the price to launch one way or another now if after this consolidation price has dropped that

Would be a very bearish signal and you could point back to these two events right here and say okay this is the continuation of what investors thought there if it launches higher hey then things are good this trend will

Keep going another potential outcome if we take away that pattern is that tesla stays around here we get this little bounce but in a few days we start seeing it go down again and if it breaks this 50-day line

Then that's once again a technical signal it'll be bad for tesla and bad for the market in general as i'm recording this the thing is already going flat so this bounce might not last now as far as elon's

Management doing these two things i think he's doing absolutely the right thing stock split great idea get more people into the stock and then he did the one-two punch right

He issued chairs right after that collect as much money as you can while you can benefit off this sentiment right people want your shares you got a great company doing a great

Thing and maybe i shouldn't say great company we don't really know what's happening with the accounting and the financials but i'm feeling way more confident as elon keeps issuing shares collecting the

Money when he can because you don't want another 2008 scenario where tesla is just on the brink elon's other companies are on the brink and he's sleeping on people's couches

Because he doesn't have any money so raising money when times are good is the way to do it and then you stash that money away for the rough times that are absolutely gonna come i know we all forgot that

They could come because powell has been keeping these markets up but they're coming and elon is preparing i was actually watching a video about tesla cars recently and they were saying that the

Silicon valley process applied to car manufacturing is kind of weird because the idea in silicon valley is get out the mvp right the minimal viable product get it out to the customer start testing and then

Improve the product off their feedback now this works in software right because if there's bugs or if they want to add features they add them and then all their customers automatically have them because it's all

Virtual obviously but in physical cars if you're making improvements well you're not going to be able to disseminate that to everybody so the early adopters kind of get screwed so in

That video they were showing parts of teslas that are basically zip tied together inside the machine which is not the best way to do it you shouldn't be putting a car together with zip ties their paint

Is supposedly pretty bad it's soft gets scratched a lot they create a lot of panel gaps in the car with their manufacturing process they don't have a heat pump on the earlier models so if you're in a colder

Place like michigan well then to get heat into your car it's going to drain the battery like crazy and these are all things that they're fixing now like the newer versions do have

Heat pumps in them but it's funny because their earliest adopters are probably getting the worst product but everyone is just fine with it because everyone loves tesla they're okay they'll live with it

Which is kind of another indicator of sentiment now overall of course they're great cars it's just that tesla is a young manufacturer these other guys have been doing it for 100 years and they still have problems

Too they have all these same problems panel gaps bad manufacturing but over time tesla should get better and better which is why i'm happy when elon is raising money because just in case there is a hard

Time they can keep improving the worst would be if they shut down now with our strategy we have been in tesla since 4-1 so april 1st that's all the way back here and actually we were in tesla before

That like way from back here since november i think but in that recent drop in march we sold our position and then we re-entered and then we've been holding it ever since and the way we do

That is with momentum which is what we go into in depth in this training but basically what our strategy does is rank all the stocks in the nasdaq by their momentum rankings which is what

This tsi is right here it's a trend strength indicator so the higher the number we know the stronger the momentum in the stock and what we do is invest in the five stocks with the highest momentum and each month we do a rotation

So we sell the stocks that lose momentum and reinvest in the ones that have the high momentum still because this list is always changing right depending on what happens in the market and that way with that once a month

Rotation we're always in the stocks that are moving higher the fastest because that's what momentum is and it's great because it's all quant based with numbers it doesn't take any research i spend literally 15 minutes a

Month doing it and it's all thoroughly tested everything is in place it's a systematic strategy so i don't have to think about when i'm buying or selling it's already set

Prevents a lot of over trading and a lot of stress i was very glad to move to systems from discretionary trading is tesla good stock well you could make a million arguments that it is a good stock and a

Million that it isn't or you could use one simple number to tell you and that's what tesla is ranked number two on this list and that's why we're still in it and we're going to continue to stay in it

Until it drops out of this list or it hits its wrist point which for us right now it's at 215 which is very very low compared to where we are right now and the reason we're comfortable keeping it that low is because we've been

Managing this stock properly this entire run higher and what's the most important thing in investing in trading risk control and risk control is not only about setting a stop

About where you'll get out of the stock when it drops low enough which for us as i said is at 215 level so way down here but risk control is also taking profits as stocks move higher so we have a systemized strategy

For that you can see in these other examples p1 p3 that all stands for price target 1 price target 3. so in tesla's case we hit all three price targets because this thing is up so much like our total

Return in the stock right now is over 100 but taking profits as it keeps moving higher that ensures that you take money off the table so that when the thing turns around you're not getting a big

Hit so if you look right here we only have 12.5 of our original tesla position because we've been selling on the way up so even if this thing drops down to 215 we aren't losing that much we're gonna

Still be profitable and the reason we're keeping it so far away is because we think this thing has more room to run which isn't based off technical or fundamental analysis or

Anything it's purely quant so again when we go down to this number we see it's still number two on the list of the tsi so we know it still has room to run and that's how i like it i don't like making those

Discretionary decisions anymore it's too stressful and it doesn't work well being systematic has really done wonders for my returns you can see right now with this full strategy not just tesla we're

Up 52 versus the market which is up 30. and since 2008 it's almost 2 000 versus the market which is 552. you see the equity curves right here our strategy versus the market

And the reason why they separate themselves so much is not only because we get better returns but it's because we manage the downside better so during big dips in the market like this what we saw in march we're out that's why we

Sold our tesla position here we got back in but it was the right move to sell here too because who knows what was gonna happen no one knew that the market was going to rebound like that no matter what they

Tell you that's why you manage your risk so when the time it doesn't rebound happens you're safe and once again we're in that situation right now is this thing going to rebound it's rebounding so far but what if it

Turns around that's why you got to do that management that's why risk control is important anyway this training goes more into that strategy it's very simple to use you'll see how to do it uh there's a link in

This video and down below in the description comments definitely check it out it's free and really it's not just me that's bullish on tesla some of the smartest analysts in the game are bullish as well

For example this guy bro did you hear that tesla just sold five billion dollars worth of shares what's going on do they not have enough liquidity or what are they going bankrupt i don't know

Chill out my child this is great for tesla because that additional five billion dollars is enough to build another three to five gig of factories which means more production and buying more equipment to

Bring costs down so trust me tesla isn't going bankrupt man i'm happy to hear that i'm actually gonna buy more shares i mean you can't lose with the smart money behind tesla like that guy even

Tom cruise isn't on tesla 20 drop and tesla share price yeah i'm backing up that truck and i'm buying more you know why because sometimes you just gotta say what the

Make your move show me the money show me the money i mean how are you gonna argue with the american icon tom cruise love that guy anyway check out the training and subscribe to the channel if you

Haven't already so i could see you in the next video do all that and i'll see you then stay fallible out there bye


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