Profit Pregame

Here’s Why I’m Not Buying into the “End of Tesla” Narrative

Has Tesla hit its peak?

We’ve talked about Tesla a lot here at Profit Pregame. The stock has been on a hot streak, seemingly hitting new highs daily. But every stop has its limit, and after Friday, many wonder if the electric car leader has hit theirs…

Friday morning, Tesla felt the pressure of investors’ continued profit-taking action. The stock fell 8%, building on the 5% decline the stock has seen the day before. These losses but Tesla on track for its first back-to-back weekly decline since May.

This fall follows on the heels of other significant stock losses as well. Amazon, Apple, Netflix, and Google were all down at least 0.8% Friday. And these losses can most likely be attributed to increasing concerns over the global economy as the coronavirus pandemic swells, and U.S.-China tensions rise.

But despite this fall back, Tesla remains one of my favorite stocks to have in my portfolio, specifically for short-term opportunities. And that’s why I’ll continue to look for profitable setups in this electric car maker despite its small falter.

Trading tip of the week…

My tip of the week?

Don’t hold a trade into earnings.

Not everyone might agree with this, but I’m always looking to take the trade-off before the company reports earnings. And the reason why is simple…

It’s well-known that after earnings, we always see a sharp drop in implied volatility. When implied volatility bottoms out, it’s possible to be right with direction but still lose money. And that’s the last thing I want so I’m sure to exit at least the day before.

And this is possible by keeping an active schedule of upcoming earnings reports. I start my week off by updating my earnings calendar board. And I’m sure to check it after every new trade to ensure I have my exit plan in place.

By doing this, it allows me to have a peace of mind and be prepared all while protecting my bottom dollar.

Here’s the rundown…

Last week was another busy one for my Project 303 readers and me…

I provided recommendations for how to play telecom, entertainment, electronics, and automobile picks.

But this was just another week for us, thanks to my S.C.A.N. trading system.

I specifically designed the algorithms to detect the best opportunities across all markets, evidenced by this week’s diverse group.

As a reader of my Profit Pregame, I want to offer you the chance to join us in Project 303, before the next round of recommendations are issued.

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The earnings report that has caught my eye:

It’s another week of earnings reports.

And I know you don’t have time to be sifting through all the numbers and news.

So, here’s the one I’ll be focusing on, and I think you should too:

Starbucks Corporation (SBUX).

The world’s largest coffee chain is officially stepping up to the plate next week to report their highly anticipated earnings.

And analysts aren’t calling for the brightest future. The company is expected to report quarterly revenue of $4.13 billion. That’s a whopping 39.5% down from a year ago. According to analysts, losses per share are expected to come in at $0.60, which would be 177% down from last year.

But if we’ve learned anything this year, nothing is set in stone. So, needless to say, I am looking forward to this earnings report and what America’s favorite coffee shop could bring to the table. And I’ll be sure to keep you updated.

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