TSLA Stock Short Trade Plan: January 14, 2025

Disclaimer: This trade plan is designed for educational purposes only. Traders should assess their own risk tolerance and financial situation before proceeding. All trades are at your own risk.

TSLA deliveries
TSLA deliveries

Trade Plan Details

  1. Short Entry Levels

    • Order 1: Sell 100 units at $424.39 (16.67% of position budget).
    • Order 2: Sell 200 units at $425.39 (33.33% of position budget).
    • Order 3: Sell 300 units at $427.39 (50.00% of position budget).
    • Weighted Average Entry Price: $426.22 (if all orders are filled).

  2. Stop Loss

    • Set at $428.55, which corresponds to apx a 0.5% move above the weighted entry price.
    • Loss per share: $2.13.
    • Total loss for the full position (600 shares): -$1,278.67.

  3. Take Profit

    • Target price: $404.91, representing a 5% decline from the weighted entry price.
    • Profit per share: $21.31.
    • Total profit for the full position (600 shares): $14,065.37.

  4. Reward-to-Risk Ratio

    • 10.00 (High reward-to-risk, favoring the trade setup).

TSLA Stock Short Execution Strategy

  1. Initial Orders

    • Start with a small size (100 shares) at $424.39 to gain exposure.
    • Increase size progressively as the price moves toward $427.39.

  2. Stop Loss Management

    • Place the stop loss at $428.55, slightly above the highest entry price to allow for price fluctuations.
    • If the price crosses $428.55, exit the position to cap losses.

  3. Take Profit Strategy

    • Set the profit target at $404.91. Use a limit order to secure profits if the stock reaches this level.

  4. Partial Exits

    • Consider partial profit-taking near $410.00 to lock in gains while leaving the remainder of the position to hit the final target.

TSLA Stock Short Risk Management

  • Capital Allocation: The total position size of $255,734.00 represents a large allocation. Adjust the number of shares to match your risk tolerance.
  • Position Scaling: Avoid overcommitting at the initial level; scale into the position using the defined tiers.

TSLA Stock Short Market Context

  • Trend Analysis: Review the overall market trend and Tesla's technical levels to confirm bearish momentum.
  • Volatility Considerations: Monitor TSLA's intraday volatility to ensure the stop loss and take profit levels are realistic.
  • News Impact: Stay updated on Tesla-related news, which could affect price movement.

TSLA Stock Short Summary

This short trade plan for TSLA stock offers a high reward-to-risk ratio (10:1) with a structured approach to entry, stop loss, and profit-taking. Adjust position size as per your account balance and risk preferences.

Trade at your own risk. Visit ForexLive.com for additional views.

UPDATE ON THIS SHORT IDEA ON TESLA STOCK

The fill to the short was missed due to the price reversing down at the current high of the day $422.362 - lower than the 1st entry, planned for $424.39. The Take Profit Strategy of the plan was with a profit target at $404.91 and TSLA stock reached a low of $404.25. The directional bias was correct, the target was a good one but we missed the fill. The trade now becomes invalid/cancelled.