Tesla Motors (TSLA) gapped higher by 14% in after hours trading after a strong earnings report, beating revenue estimates. It is currently up 15% in premarket trading. TSLA has been the leader of leading stocks in the current cycle. TSLA has only been climbing for a brief while, up about 275% from its breakout if it opens at 150. Thus, today's gap up is a buyable gap up since the best leaders in any cycle are generally up several hundred percent or more. That said, TSLA is trading about 150% above its 200-day moving average if it opens around 150. While this is a very high percent above its 200-dma, history shows such leading stocks should continue their move higher, though with volatility, so position size with care. Should the markets have a correction here, TSLA could tumble further before regaining its footing.
If you sold some or all of TSLA before earnings, you can buy back part or all of your position, using the BGU sell rules we have outlined in the FAQs and keeping in mind your risk tolerance levels.
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