Gut check time for Tesla shareholders

It is common for the Tesla fan boys to harass, slander, bully, and try to censor skeptics and critics of Tesla. They can't handle facts, logic, knowledge or reason that goes against Tesla. They give Tesla a bad name, not all Tesla enthusiasts are horrible. The Tesla fan boys will say or do almost anything to try to keep the Tesla bubble expanding.

The Tesla model S. still has defects that make it a fire hazard. Tesla charger connections are still overheating, melting and burning. Tesla is Junk.

On 1/9/2014 Elon Musk said that replacement adapters that are part of the recall would be mailed out within two weeks. A month later Tesla customers have still not received the replacement adapters that are part of the Tesla model S. recall.

Tesla is big on making promises and hype, but short on delivery. Tesla needs to start making safety a top priority. Tesla needs to stop playing blame games and games with semantics. Tesla needs to stop lying. Tesla needs to be proactive instead of reactive. Tesla is being a follower of technology, rather than a leader. The Tesla model S. is an E-Pinto.

Mr. Goreham's piece was on the Telsa stock, not so much on their product. Quite frankly, Telsa has room to run due to the high level of innovation and market penetration in such a (relatively) short period of time. From a value investor perspective, Telsa would be sell because there is no value at the current valuation compared to Tesla's peers. From the perspective of a growth investor, there is room for stock appreciation due to the low penetration and the potential to reach a broader market with lower price models. From a technical/speculator perspective, Telsa is ripe for acquisition. In a short time, Telsa has become THE electric car manufacturer, like it or not. If I were a board member of Ford, VW or other manufacturer, I would be war gaming an acquisition of Telsa and seriously considering a 'checkbook engineering' approach to electric vehicle technology. Cisco, Intel, Apple, etc... all employ this approach to acquiring new technology and eliminating potential competitors.

My gut check tells me that because Telsa is admired (again, like it or not) by the media and industry and has accomplished what Huyndai, Kia, Honda took decades to accomplish in a relatively shorter period of time. Couple that with the potential of a mature auto manufacture's engineering and production capabilities, I see Tesla being acquired in the next 3-5 years. Valuation is tough, because I believe this notion is already baked into the current stock price.

Looked at the TSLA stock chart using my own chart parameters that include day, hour and 10-minute bars. All look strong on the bullish side. The 200 day MA is at 139.76, far below the stock's price of 198 area as I write. Even my triple moving averages of MA5, EMA17 and EMA 43 are all in order, below present price but positive and point upward. So, that spells strong bull, but that's also past performance. Here's a link from my Thinkorswim platform - (REF: tos.mx/Jsjj93 )

What will the stock do next with earnings report day coming up? I have no idea where it's going; and neither does anyone else. If you are already long the stock, then pulling out may not make sense, but protection does if you want to protect profits. That's where options and option spreads come in.

Regarding the earnings day, I would pay attention to the conference call afterward. Forward looking statements will have their effect on the stock volatility. The stock may correct; it may not, but volatility is almost a given.

Some traders, like me, will sell put options beforehand for income as the premium crashes after the news. Even if the stock remains stagnant, I will make money on the time crush of the option.

Bottom line, though, is that Tesla as a company and as a stock is in a strong position. A pullback may be the opportunity to get more long. Like Jim Cramer of CNBC often advises, though, it may be wise to wait and see how the market reacts; then play accordingly.

OK, let me reword a bit. You remember that old biblical saying, "To everything there is a purpose." Well, there is a time to buy, a time to hold and a time to sell. I use the technical indicators to help me decide which camp I want to be in. In this case with TSLA, I have no present position. However, if I did, I would hold and perhaps use a put option for insurance, IF I believed the earnings report may have negative surprise. Now IF I was looking to buy (which I am), I would wait until AFTER the report and buy at a discount on any pullbacks. Better to buy wholesale rather than retail.

Hope that helps, as I live with this stuff everyday and forget that not everyone gets my jargon.