Tesla Motors popped on an upgrade last week, and now the bulls
think it's ready to run.
optionMONSTER's Heat Seeker tracking system detected an explosion
of all buying in the maker of electric cars, whose revenue nearly
doubled the last time it reported earnings on Feb. 15. Results beat
forecasts on both the top and bottom lines.
It received a jolt higher on March 31 when Morgan Stanley upgraded
the shares to "overweight" from "equal weight," and predicted they
would triple to $70 as customers shift away from
internal-combustion engines. TSLA had been consolidating since
then, but started moving yesterday and ended the session up 2.83
percent to $27.24.
The April 25 calls were the most active strike, trading 5,920 times
against open interest of 1,594 contracts. Premiums on the large
blocks fluctuated from $2.20 to $2.55. The April 27s saw volume of
almost 2,000, and mostly priced for $0.85 to $1.50.
It's noteworthy that both contracts are in-the-money, letting
investors lock in an entry prices in case TSLA runs away over the
course of the next week.
There was also heavy buying in the April 30s for $0.35 and the
September 26s for $4.30. By the end of trading, calls outnumbered
puts by a bullish 15-to-1 ratio, and total options volume was
quadruple the daily average.
TSLA, named after the Serbian-born electrical engineer whose
alternating-current system bettered Thomas Edison's direct current,
went public for $17 a share last June. It traded over $35 at the
end of the year before retreating and finding support around $22 in
February and March ahead of the big call by Morgan Stanley, which
was one of the three lead banks on its IPO (see chart at right).
(Chart courtesy of tradeMONSTER)