Tesla Motors (TSLA) slips as Twitter majority votes for Musk to sell $20B in shares

Even despite this morning’s drop, the stock is still trading more than 50% higher over the last six weeks alone...

Tech (1)

There’s never a dull moment when it comes to trading the world’s newest trillion-dollar company…even when the market’s closed!

Over the weekend, Tesla Motors (TSLA) CEO Elon Musk posted a twitter poll asking his followers to weigh in on whether he should sell 10% of his shares in the company, an amount equivalent to over $20B dollars. While its impossible to speculate on the mercurial CEO’s motives, he has indicated that he’ll abide by the results of his poll, which has now closed with about 58% of the more than 3.5M votes (!) in favor of the sale:



Not surprisingly, news that the EV company’s CEO and biggest cheerleader will be selling more than 2% of TSLA’s total float has some momentum traders bailing out of the stock, with shares trading down by nearly -5% as we go to press.

For more context on the news and today’s move in TSLA shares, see this morning’s articles from my colleagues Josh Warner and Fiona Cincotta!

TSLA technical analysis

Euphoria over the shares has reached a fever pitch in recent weeks, leaving the stock vulnerable to a quick reversal if the momentum falters. That said, bears who believe that the stock is overvalued should remember the infamous words of John Maynard Keynes: “The market can remain irrational longer than you can remain solvent.” Countless short sellers have been absolutely wrecked by betting against Tesla over the last half decade, and there’s no reason it can’t continue to rise from here in the short term.

Even despite this morning’s drop, the stock is still trading more than 50% higher over the last six weeks alone, and given the stock’s resilience to negative news in the past (remember Musk’s “Tesla stock price is too high imo” tweet last year?), it seems unlikely that Elon selling a small minority of his shares will be enough to entirely derail TSLA’s staggering rally by itself.

Any time a trading instrument is in the midst of a parabolic move, risk management is critical. In the case of TSLA, bullish traders could use a short-term moving average, like the 8-day EMA, as a possible stop loss area. If the stock breaks and closes below that price, it could signal that a deeper pullback is in play. Likewise, rather than blindly shorting at these stratospheric levels, TSLA bears could wait for a breakdown below the 8-day EMA (or, more conservatively, a bearish crossover of the 8-day EMA back below the 21-day EMA) to consider short entries with a tight stop loss.



Source: TradingView, StoneX

How to trade with City Index

You can trade easily trade with City Index by using these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    Open an account in the UK
    Open an account in Australia
    Open an account in Singapore

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.