Last Updated:
First Published:
Tesla
TSLA has been in a steep downtrend — a decline that began in mid-December. The stock finally had a strong up day on March 12 after announcing a partnership of sorts with Baidu BIDU in China. Is the bottom in for Tesla stock? Is the option market giving us any clues?
The first place I would look for a clue from Tesla options is the weighted put-call ratio. That chart is shown below. There was a local minimum at an extremely low level last December. Local minima on the put-call ratio chart at extreme levels are sell-signals for the underlying stock. That was certainly accurate. Not every local maximum or minimum at an extreme level has been such a good signal as the most recent one. Those signals are marked on the chart (red letters indicate successful signals, while blue letters indicate signals that did not pan out).
