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Time To Buy Tesla

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David Pinsen's Blog
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  • Despite its pullback from its all-time high, Tesla was one of our top ten names on Monday.
  • Social data analyzed by LikeFolio is bullish on Tesla as well.

Tesla sedans getting recharged in a local Wawa convenience store parking lot. 

After Getting Crushed

After we wrote about our top ten names from June 17th getting crushed, one correspondent wondered which names our system liked now, in the hopes of betting against them. We'd advise against that, but here you go:

Screen capture via Portfolio Armor on 12/20/2021. 

One thing you may have noticed from Monday's top ten list is that it includes a few tech names that are down double digits over the last month: the chipmakers Advanced Micro Devices (AMD) and Nvidia (NVDA), the streaming content company Netflix (NFLX), and the electric car maker Tesla (TSLA). We'll focus on Tesla here, because, coincidentally, it was highlighted by our friends at the social data firm Likefolio on Monday as well. 

What Social Media Data Says About Tesla

Social media is essentially a firehouse of people broadcasting their thoughts. A lot of those thoughts are of little interest to others outside of their social media followers, but Likefolio zeroes in on the thoughts that are relevant to investors: in particular "purchase intent" mentions. If you aggregate all the people talking about how they are about to buy a particular product, you get a sense of the demand for that product. According to Likefolio, consumer demand for electric vehicles has never been higher. 

And when consumers talk about buying an electric car, 97% of the time, they're talking about buying a Tesla. 

According to Likefolio, consumer purchase intent mentions for Tesla specifically this quarter are on pace to be the highest ever. 

The Bottom Line

As of Monday's close, Tesla was down about 28% from its all-time-high in November. Despite that, our system's gauges of options market sentiment were bullish on it on Monday, and Likefolio's gauges of social data suggest customers are buying a lot of Tesla's vehicles now. Taken together, that seems auspicious for Tesla shares over the next several months. As always, we suggest those who buy Tesla or any of our other top names consider hedging in the event we end up being wrong, or the market goes against us. You can use our website or our iPhone app to scan for optimal hedges on Tesla.  

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Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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