Is TSLA stock a but after its big earnings drop?
The recent earnings announcement from Tesla, last night on 24 Jan 2024, has resulted in a notable 7% to 8% decline in its stock price so far, sparking discussions among investors about potential buying opportunities. This situation has brought to light a unique investment strategy that introduces a staggering 12 to 1 reward-to-risk ratio, particularly appealing to long-term investors looking to capitalize on Tesla’s current market position.
A patience-rewarding tade strategy for TSLA stock
Itai Levitan at ForexLive.com suggests to consider, at your own risk, a strategic approach for investors eyeing Tesla’s stock. The identified trading range for Tesla, spanning from $100 to $400, has been consistent since August 2020. This range is characterized by significant trading activity and is anchored by two pivotal price levels: the value area high at $162.50 and the value area low at $142.78.
The strategy is based on patience and precision, recommending buy orders at key points. The initial buy order is set at $163.77, with subsequent buy orders at $157.73, $142.78, and $131.76. These points target the lower ends of the identified range, aiming for an advantageous entry into the market.
TSLA STOCK TECHNICAL ANALYSIS VIDEO, PRICE FORCAST AND LONG TERM TRADE PLAN WITH A 12 TO 1 REWAR VS RISK POTENTIAL
- Averaging out an attractive entry price for this Tesla stock trade plan
If the market fills all these orders, the average entry price consolidates at $148.82. This average reflects the comprehensive cost per share across the entire investment, offering a balanced entry point. - Always have a stop, in ths case sell your TSLA Long position close to 141
To manage potential risks, a stop-loss order is advised at 5% below the average entry price, at $141.38 . This tactic is crucial for limiting losses in case of unexpected market downturns.
Unlocking high reward potential for this long-term TSLA trade plan
The strategy’s strength lies in its extremely high reward-to-risk ratio. Two profit-taking levels are identified: $197.13 and $238.00. The first level offers a 6 to 1 ratio, where traders would sell a third of third Long position, while the second a 12 to 1, fo selling another third of the position, an the third profit target at 18 to 1, thus averages the potential to an impressive 12 to 1.
Effective risk management and profit taking, a third at each profit target
It is recommended to liquidate one-third of the position at each profit-taking level. This method allows for securing gains while also mitigating the risk of market reversals.
This investment approach is tailored for those who are patient and willing to wait for the market to align with the identified price ranges. It’s a strategy more suited for long-term investors rather than those looking for immediate returns. Do return to ForexLive.com for future updates and various views.
This article was written by Itai Levitan at www.forexlive.com. Source