008. PIGGISH PLAY - Long NIO (Chesla)It has become apparent that Tesla has turned manic-bullish again.
And sure, I could have concocted a very complex iron condor for the next two weeks to try locking in solid gains early on. The problems I had with this idea, in the context of the Piggish Play Series, were that such a combination 1) lacks execution feasibility, and 2) is extraordinarily expensive. Also, despite the Condor's complexity and the deep thinking that is required to create it in this case, such a play still lacks creativity because it ultimately seeks to do the aforementioned obvious - long Tesla, which would undermine the integrity of the Piggish Play Series. I will not allow such hijinx.
Nevertheless, I am still long Tesla since last Monday and still think it's very much a buy, all else equal.
Porque?
Porque, I have longed this thing from 500, subsequently shorted it at 960, and then shorted it again at 900. I will say this - being long is MUCH easier (and more profitable) than being short. But it's only safe to be unconditionally long when the tape reads a certain way. Right now, the tape is reading as bullish as it did at 500 - 600, which means there are fewer plays worth considering at this very moment, across all markets. If you want to simply long Tesla, I support the decision. If you want to find a cheaper, supplemental approach, long NIO, i.e., the People's Republic of Chesla.
NIO is Chinese Tesla . Whether this statement is actually true or not doesn't matter. The correlation coefficient supports the statement and that's good enough for me. So, let's take advantage of the Piggy-backing, made-in-China knockoff, and make some cake the sneaky way.
I would say that the moment that Chesla passes 10 dollars/share, retests, and proves it as reasonably strong support, buy at least 10 calls with a 12 dollar strike expiring on 7/10. Keep the position light at first and then continue adding dips below 10.30 to the main position with the same strike/expiry above. After Tuesday at 12 pm, start building a secondary position if it is still trading under 10.50/share. The strike should adjust up 1 dollar to 13 and out one week to 7/17. By Wednesday, Chesla should be near-ish to the first strike of 12 and you can start to unwind the first position for a very nice profit indeed.
By Thursday, I will only be holding 13+ strikes expiring on 7/17 and would advise you all to aim for a similar position.
Chesla will run with Tesla, Tesla will run towards 1500/2000 and Nikola will probably end up ruining many traders' accounts because it is absolutely not Tesla, nor is it quite Chesla, either.
- Automobullish Pig
NYSE:NIO NASDAQ:TSLA NASDAQ:NDX
