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He shorted Tesla (a riches to rags story)

An oldie, but a goodie...

In Reminiscences of a Stock Operator, protagonist Larry Livingston (aka Jesse Livermore) reminds readers of an old phrase, "He went short of Harlem", which veteran speculators used as a shorthand for "he went bust".

Maybe the modern version of that phrase is, "he went short of Tesla". 


Your ego may be telling you that the stock is "overvalued" and the bulls are wrong, but the market is telling us that Tesla is an emerging new leader in its dynamic growth phase. The price chart shows a very clear uptrend in progress - demand for the stock is fueling its ascent (for now).



Until the facts change and the stock chart reveals a topping pattern and a shift towards a "stage 4" decline (see Stan Weinstein and Mark Minervini for more on this), a long or neutral (on the sidelines) bias would likely be best. 

This applies not just to Tesla, but to any stock going through the life cycle of neglect (base forming) to major accumulation, distribution, and eventual decline. 

Disclosure: I have no current position in the stock at the time of writing. This can change at any time in the future (after posts are published). These posts are an educational exercise for myself and for readers, personalized investment advice is not offered here.

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