When Tesla squeezes, it will be epic
The moment when we have a squeeze in Tesla, it will be epic. Remember this - Market overreacts on the downside, as well as on the upside. Look at Nvidia, Netflix, etc. The squeeze could be temporary, but it can be massive.
It’s all about ripple effect.
On the downside, when investors get margin called and forced to sell stocks against their will, it will cause the price to drop. Then you have big players dumping shares at year end to cleanse out losing stocks / losers. The stocks drops further.
At this point, early investors of Tesla will want to take profits, they sell, and the price drops even more. Next, you add in retail investors selling them for tax loss harvesting purpose, the stock continues to fall. Finally, you will have the paper hands investors who panic sell. And oh, rumour has it that Elon could be margin called too. All these adds up to capitulation in the stock.
On the upside, when big players start to cover their short positions, the price will rise. That is when more players will cover their shorts so that they do not lose out on profits. And more and more will do so - creating a ripple effect. Then you have FOMO investors piling in to pick up the shares as they thought that the stock has bottomed. All these will cause a short squeeze and massive rise in the stock price.
Don’t get too excited yet with this pre market rally. If this is indeed a short squeeze, the epic moment has just begun. Otherwise, it would be a headfake before we plunge to 100 and below
I am not sure when will the squeeze happen because I don’t have a crystal ball here. I only have some popcorns as I wait for the market to open.
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LuckyPiggie : today ?
Adam Goh : You’re right and true
Cow Moo-neyOP LuckyPiggie: I don’t know haha I cannot predict when
LuckyPiggie Cow Moo-neyOP: haha .. bec i saw it suddenly went up . Not sure is it a trap
Cow Moo-neyOP LuckyPiggie: Give it some time to settle then