Written by Rick Ackerman, Rick’s Picks
Will TSLA Lead Stocks Over a Cliff?
TSLA’s rally is so frothing-at-the-mouth stupid-scary that it’s tempting to think the stock is about to lead the high-fliers over a cliff. The automaker’s shares took a rabid leap Thursday, driven by the epiphany that the company isn’t burning cash quite as quickly as Wall Street’s best and brightest had estimated.
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What really juiced the stock was a solemn promise from founder Elon Musk that, from this point forward, Tesla is going to be profitable. Moreover, he promised he wouldn’t go any deeper into hock to keep production lines running at full tilt.
Say one thing for the guy, he’s got brass balls, considering that even a selloff in the stock market in months ahead could turn his rosy forecast to suet.
Regardless, traders bought the ‘new’ Tesla with reckless abandon Thursday, particularly bears who had bet the ‘Don’t Pass’ line aggressively. Turns out there are no more shares for shorts to borrow, a situation that could propel TSLA even high as the week ends. We shouldn’t be too eager to get in its way, but that doesn’t mean we can’t enjoy the show.
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