FX168 Financial Newspaper (Hong Kong) News For Tesla, Monday is a milestone day.
The automaker's stock price surpassed $1,000 for the first time, entering the $1 trillion club, and the likes of Apple and Microsoft are among the few stocks with a market capitalization that exceed that threshold.
Car rental company Hertz said it would buy 100,000 cars to bolster its electric car fleet, and the order will be fully completed by the end of 2022, after which Tesla shares rose nearly 13 percent.
"It's a typical stock that usually trades around a key psychological value, and in the options market, it tends to stay at that level." Danielle Shay, head of options at Simpler Trading, said monday on CNBC's show.
After Tesla's latest milestone, Shay's goal is to look to a higher level.
"I think the price will reach $1200. We are in this range where the November series expires and I like to trade with (butterfly spreads). They're cheap, low risk, high reward, and they can do some great momentum trading," she said.
Shay suggests trading Tesla for longer-term butterfly spreads — for example, buying a 1050 call option, selling a 1200 call option, and buying a second call at 1350, which expires in November or December.
"I also say December because I like the 'Christmas quotes' effect and the January earnings season," she said in a follow-up email to CNBC. It seemed like a perfect storm, so I increased my risk in December/January. ”
If Tesla shares rise to $1,200, it means the stock will be up about 17% from Monday's closing price. At the close of the session, Tesla shares were close to $1,025.
Oppenheimer's head of technical analysis, Ari Wald, is also bullish on Tesla and agrees with Shay's $1,200 goal. Wald had previously suggested buying on Oct. 4 — the stock closed just over $781 that day.
"If you want to give our clients the best investment advice, it's to let your winner run, and that's the winner," Wald said in the same interview. "If you look at Tesla's stock, the most recent strength we see on the chart is above the January peak, and we think this breakout marks a return to Tesla's long-term uptrend."
"The $900 breakout point is now support, and the $1,200 trend is about to emerge. We like higher prices," he said.
Tesla's stock is up 45 percent this year.
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