Profit Pregame

Exactly How You Should Play That Recent Tesla Snub

Tesla has hit a stop…

After a historical rally, Tesla just hit a bump in the road.

What’s happening?

S&P Dow Jones Indices rebalances its indexes every quarter. A company needs to meet specific qualifications to be considered, including four consecutive quarters of profitability. So, investors eagerly await to see what stocks get added and removed when this time rolls around.

And many expected Tesla to be listed on the list of new stocks being added to the S&P – so imagine the panic when Tesla didn’t make the cut.

The decision not to add the stock to the S&P 500 surprised the entire market, especially those waiting for weeks on this decision- excited after Tesla reported a second-quarter profit in July. Tesla had ticked off many of the requirements needed to be considered for this index, but still didn’t satisfy the S&P committee.

Where’s the money?

Tesla is now among the top 15 largest companies in the U.S. when measured by market capitalization – sitting at $320 billion. This makes the electric car marker the size of long-standing giants like Nvidia. And at one point, Tesla grew to be the seventh-largest company in the U.S. But size isn’t all that matters when it comes to the S&P.

Unlike other benchmarks, the S&P isn’t driven by a strict set of rules or qualifications. Instead, the benchmark relies on a committee to decide what gets added and removed.

And this snub didn’t bode well for the electric car maker’s stock either. Tesla shares were down 19% in early trading Tuesday, wiping out more than $70 billion in market value. And the stock continues to struggle to find solid ground.

But before you jump at this new price tag, there’s something I want you to know.

How can I get some?

Let’s be honest; Tesla has had an impressive year – one no one could have predicted. So, the snub by the S&P was surprising. But don’t let it dictate your trading plan.

Investors seem to be taking profits on the stock after an incredible 1,000% rally over the last year. And even after the stock’s sell-off over the last week, shares are still up over 690%. And I know this growth potential and lower price tag might be enticing – but I’m here to tell you that I don’t believe this downward spiral is over. Not even close.

In fact, I believe that the automaker could sell off to the $230 level. And if the market is weak (like we’ve seen the last few days), investors will be looking to sell the stock anymore.

And that’s precisely why I’m currently not looking to add TSLA to my lineup. Instead, I am turning to a company presenting definite growth plans with strategic partnerships and concepts – General Motors (GM).

As you’ll read below, GM has been making some great business decision lately and it’s painting a bright picture for the future. So, I’m giving this historical automobile maker the green light to buy, right now. And you can read more about the recent business decisions\ GM has been making below…

In the spotlight: Nikola

We’ve talked a lot about the battle of the electric car. And it seems like daily, there’s a new company throwing their hat in the ring, attempting to become an industry leader. But only a handful of big names have continued to lead the industry. And today, one of those stagnant names got a massive boost.

General Motors and Nikola have officially teamed up to work on the Nikola Badger, a fully electric and hydrogen fuel cell electric pickup truck. The partnership gives General Motors (GM) an 11% stake in the startup, receiving $2 billion in equity and the right to nominate one director to Nikola’s board.

General Motors already has electric pickups and SUVS nearing production – so the Badger truck will share most of its engineering with those vehicles. Nikola is hoping to have The Badger on the market by 2022.

This strategic partnership by both companies as General Motors remains ahead of the curve for electric car technology, and Nikola has garnered massive media attention. So, it’s a win for all involved. And investors seemed to agree as Nikola shares rose 33$.

And I’ll be keeping a close eye on Nikola’s development, and as soon as a profit opportunity develops – you’ll be the first to know.

There’s Always a Way to Profit…

Even in spite of Tesla’s exclusion from the S&P 500, its consistent place in the headlines keeps investors interested.

But my research into GM and Nikola is just the latest example of how some of the biggest profit potential continues to fly under the radar.

By applying the algorithms used in my S.C.A.N. trading system, I’m able to cut the best plays from the herd and tell my Project 303 readers exactly when to strike…

Today’s your chance to get on board before I announce our next pick.

Click here now.

Community Tips

0 Comments
Inline Feedbacks
View all comments