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The last time famous short seller,  Andrew Left made headlines he said Peloton is heading to $5 by the end of 2020 unless Peloton invents a piece of equipment that works out for you.  Andrew's thesis was Peloton’s enterprise valuation didn't make sense compared to Planet Fitness and Fitbit.

The last two days Tesla stock price has close each day up more than $100.  $780 and was up 20% yesterday.  Tesla now  has become the first American automaker to hit $100 billion valuatio, higher than General Motors and Ford combined. Tesla’s market cap is now higher than that of Costco (COST), Phillip Morris (PM), and IBM (IBM).  Tesla's stock has now doubled in price in year to date. 

On Tues., Andrew made headlines once again with this tweet. 

![](https://cdn.steemitimages.com/DQmY49j5eSrqXTaZfqkcXhdRnurVqT8nwuH2BCD4TcERHSS/image.png)

Once upon a time Andrew was short Tesla, then he went long, then he got out of the stock all together.  But many on Wall Street share Andrew's feelings about Tesla's perceived overvaluation. 

<blockquote>

In 2020, traders who have bet against Tesla are down more than $8 billion in mark-to-market losses and may be starting to get squeezed. But not all short-sellers are caving to the pressure, saying that even though holding onto a short bet might be painful, the stock is bound to come down as its rally is not tied to fundamentals. 

And even some long-time Tesla bulls are starting to become wary of the stock's record rally. On Tuesday, Pierre Ferragu, who held the highest Wall Street price target on Tesla many times, downgraded shares to "neutral" from "buy." In January, Adam Jonas of Morgan Stanley slapped Tesla with the firm's first "sell" rating in seven years. 

</blockquote>

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Yesterday, something interesting happened with the price action on Tesla.  After hitting a high of  $969, price pulled back and formed a doji candle.  A doji candle is a candlestick that has an open and close that are virtually equal and often signals indecision.   Today, I think what we are going to see is possible an exhaustion candle that will  indicate that the trend or the momentum has stalled and possible reverse.   My confirmation will be a close before yesterdays low. 

![](https://cdn.steemitimages.com/DQmPmHJYLNZPpbmqnRVMyiZAyhDm7Li5MgYfzhG4VD2GpRe/image.png)

If this happens, look for price to fill the gaps. 

![](https://cdn.steemitimages.com/DQmS14gEGizsRDNrQMDCP8KZxgYPxnge6fPy83vNjnub7wK/image.png)

If you believe Tesla is going to pull back and because volatility is so high, selling premium is the way to go.  Two option strategies include credit spreads or one of my favorite diagonal spreads aka calendar spreads.  Now looking at the options the bid-ask spreads are too wide, so I'm hoping when the equity market open again, the bid-ask spread will get tighter.  Who knows, if the price is right, I may just jump in as well.  

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

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