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Why I Bought More Tesla Stock on Friday

Published September 28, 2021

In the Sept. 1 issue of Stock Surge Daily, I told you I was taking a small position in Tesla, Inc. (TSLA) stock.

At the time, TSLA was just starting to break out of an “ascending triangle” consolidation pattern.

I explained that the pullbacks were becoming shallower and shallower…

Volume was decreasing, which meant less supply was coming to market…

And the moving averages had turned upwards…

The short-, medium- and long-term trends were all pointing higher.

And fundamentally, the company was seeing huge growth in both sales and earnings.

All of this created a compelling case for a long trade in TSLA.

But given the stock’s volatility, I decided to test the waters by taking a position that was about half my normal position size.

You can see my first entry into the stock in the chart below.

***Daily Chart of Tesla, Inc. (TSLA) with Initial Entry — Source: TradingView***

So far, the trade is working well. In fact, I just added to it on Friday.

TSLA jumped roughly $35 a share, then pulled back to the initial breakout area.

It continued to tighten up, and subsequent pullbacks shrank to a nice and compact 5%.

So, I added to my position when it broke $764.00 and made a new multi-month high.

As of Monday afternoon, TSLA was trading at over $795.00, which equates to a gain of roughly 9% from where I started buying earlier this month.

***Daily Chart of Tesla, Inc. (TSLA) with First & Second Entry — Source: TradingView***

Right now, my stop is at $718.60. This gives my position plenty of wiggle room in case there is another pullback.

But if TSLA continues its surging breakout, I will likely raise my stop to $744.25 to protect my profits.

As you can see, taking a partial position like this is a good way to trade a volatile stock.

It allows you to build up a small profit, which you can use to “finance” the risk.

And it allows you to add on to your initial position only once you are profitable.

I do the same thing with other volatile stocks like GameStop Corp. (GME) and AMC Entertainment Holdings, Inc. (AMC), which I told you about back in the Aug. 19 issue of Stock Surge Daily.

I’ll follow up on my AMC trade and explain how it played out for me in a future issue, so stay tuned!

Embrace the Surge,

AMC, GameStop, Tesla

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Ross Givens

I bought my first stock when I was 12 years old. It was Microsoft. I’ve been a registered financial advisor. I’ve worked as a stock broker. I ran a managed fund. I was a Vice President at JP Morgan with Series 7, Series 66 and Series 3 securities licenses. I’ve been featured on Fox Business, CNBC, Bloomberg, and a bunch of other networks. The only thing I enjoy more than making money, is helping YOU make money.

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