Telsa (NASDAQ:TSLA) is part of a constituency of stocks that I don't think I would ever short, under any circumstances. You could tell me that certain death was coming for the company tomorrow and that capital would dry up, and I still wouldn't short it. I just have this feeling like whatever the problem is, CEO Elon Musk will likely be able to engineer a solution to it.
Musk's problem solving abilities were the center of my sentiments as I was covering the direct selling fiasco of recent in New Jersey. I wasn't sure what Musk was going to do, but it was likely to be a solution, and likely to make the politicians in the state look even goofier than they already do.
And sure enough, that's what's happening. We've even had headlines over the last two days about consumers not needing dealerships at all. Instead professor Karan Girotra claims that auto dealers no longer provide value for consumers in a recent research paper.
Last week, it was announced that Arizona had warmed up to the automaker and was allowing direct sales in their state. Seeking Alpha reported:
- Tesla Motors will be allowed to sell directly to consumers in Arizona after a bill is approved in the state covering the issue.
- House Bill 2323 allows automakers in the state to sell vehicles outside the dealer network if they only make electric vehicles and have a service center in the state.
- Arizona is one of the states in consideration for Tesla's Gigafactory
New Jersey, you're going to be under the microscope as the minority when this all pans out, and you're likely to look pretty ridiculous.
Additionally, we were privy to this ridiculous headline just days ago, about Tesla drawing criticism in Germany:
- German companies Daimler (OTCPK:DDAIF) and Robert Bosch think Tesla Motors is jumping the gun in launching a supercharging network in Germany that doesn't work with EV models from other manufacturers.
- A standardized system would lower infrastructure costs across the industry, maintain execs with the firms.
Of course Daimler and Robert Bosch think that Tesla is acting out of line and jumping the gun - TSLA light years ahead of other automakers and are likely scaring them. Complaining that Tesla's stations don't work with their EV models is ridiculous. It's akin to complaining that the key to your BMW won't start the Fords (NYSE:F) around the world. You want a Supercharger network, Daimler? Get out there and build your own.
Further, with the current events behind us, we can now take a look at how Tesla has been trading. This month has been one of the most notable pullbacks for the company since its post-earnings dip to $120 last year - right before the stock took off and nearly doubled.
Tesla, like some other momentum stocks, has been clipped this week as a result of tensions in the Ukraine and valuations likely being roped in. Tesla is an interesting breed, however, because it hasn't really been a stock synonymous with offering any real dips to buy on.
Naturally, this would be a good time to consider getting into any of these names, as they've all taken pretty substantial hits over the last week. But, for Tesla, which has historically left us so few entry points, this screams out to me.
Consider Tesla's chart over the past year. There really hasn't been any "major" dips that have presented themselves as ripe for the buying. The trend we're in for the time beings looks like it could be one of those.
Additionally, the company should find some technical support off of its 50DMA at $209. Today's trading will likely tell a lot of that tale.
Consider yourself on notice; Tesla doesn't offer up a ton of these dips to buy on, and what we're in seems to be a rare and ripe occasion to get into Tesla for those who have been waiting on the sidelines. Whether or not I get my price remains to be seen.
I remain long-term bullish on Tesla and argue that this could be a fine purchase point for investors. Best of luck to all.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in TSLA over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.