Options expert Nic Chahine recently told Benzinga he was impressed that Tesla Motors Inc TSLA held support amid a market sell-off last week. He did, however, voice concerns on issues regarding factory placement and implementation.
Tesla Held Amid Falling Oil
Chahine, in particular, dove into the relationship between oil and Tesla: “In theory cheaper oil should be bad news for Tesla.” The fact that Tesla shares held, he said, implies the market believes the company offers more than an alternative to gasoline-powered automobiles.
There is excitement around the company's innovations, Chahine added.
Tesla’s Factory Situation Is A Concern
The expert notes that CEO Elon Musk chose Reno, Nevada as the location for Tesla’s lithium ion battery factory based on battery pack-completion time, rather than cost efficiency.
He warned: “If there is a problem with the factory, that could jeopardize the future of Tesla...because so much is riding on it.”
A Trading Idea
Chahine concluded with a trading idea: “Take a debit spread and guess the direction. Tesla looks like it is at a decent support and may be looking at a pop in the near future. However I haven't quite decided that yet.”
Tesla will report fourth quarter earnings after the markets close on Wednesday.
The full interview is below.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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