California Here I Come! (TSLA)

California Here I Come! (TSLA)

 

There’s an old saying that goes, “Change your address, change your luck.”

 

And for most of those who took up the call and ‘went west’ back in the day, those words held true enough.

 

As the Midwest and California opened up and were populated by newcomers eager to turn over a new leaf, so, too, were many new fortunes made.

 

And there’s no reason it should be any different today – even though the ‘frontier’ no longer exists per se.

 

There’s still plenty of life to bring to many a forgotten and less trodden path.

 

A New, Old Path

 

We’ve written in this space extensively about the advantages of returning to an agrarian lifestyle, particularly in the face of an upcoming financial crisis that will bury completely all our quaint notions of credit cards and bank machines and even coins and paper currency, items that may not be with us even a decade from today, and most certainly not in our grandchildren’s time – at least not as they are at present.

 

That’s why we’ve repeatedly returned over the years to our Four G’s investment hypothesis (Guns, Gas, Gold and Grub), in which we’ve emphasized (among other things) the crucial place a small parcel of tillable soil has in the future of those who wish to weather the coming storm.

 

For those with the foresight and means to acquire such a situation, we repeat it now – it’s time to get it done.  Find a patch of grass in the country to call your own and plant a garden.

The new frontier is actually an old one.  A century ago 95% of our citizenry earned their keep from the land.  Today, it’s precisely the opposite, with a mere 5% pulling their food from the earth.

 

Before too long, however, we expect the pendulum to swing back.

 

And remember this bit of advice that we’ve rehashed countless times here and stand to do once more (as we dodge the tomatoes you’re surely launching at us):

In fact, no one other than a general store operator, stocked with the basics in a serviceable community, will weather the storm so well as you and your fertilized earth.

 

We’ll have more to say about the new ‘back to the land’ movement that’s coming your way sometime in the next ten years (whether you like it or not), a socio-political upheaval that will completely reshape the way we interrelate and govern ourselves in this country – and likely in the rest of the world, too.

 

Because city life as we know it is fast coming to an end.

 

But how do we profit from it?

 

Among the companies that stand to profit most from the move will be both those that deal in simple farm tools and machinery, as well as transport companies, especially those that specialize in short term vehicular rentals, like Amerco Inc. (NYSE:UHAL), owners of the U-Haul brand.

 

Have a look here –

We’ve played this puppy several times for good profit in the past, and we’d do the same now, if only the technicals were a little clearer.  As it currently stands, we’d have to see 1) price break above the current consolidation range (in red) and 2) both RSI and MACD surface above their respective waterlines (in green) before we dove back in again.  So today’s trade won’t feature U-Haul, a great company with a very bright future, but perhaps soon!

 

Rather, we’ve chosen a different transportation company as our focus for today’s trade.  It’s a company that also found its feet in California, but that in our opinion has absolutely no chance of weathering the financial storm that awaits.  This is an outfit that was built on marketing flash and hype, something that California long ago became proficient at.  Call it the Hollywood Transportation Concern, because it possesses so little substance.

 

That said, it’s also a darling of the investing public, so far be it from us know-it-alls in Baltimore to tell you that we possess secret, classified information on the business or a CIA investment dossier that pertains thereto.

 

Nope.  We just follow the crowd.  Hop on board for a short, highly leveraged ride, and jump off just as fast.

 

That’s our M.O.

 

And we’re sticking to it.

The company we’re hot on today is none other than Tesla Motors (NASDAQ:TSLA), a company that shipped exactly ____ vehicles last month/quarter, yet earlier this week, held a market cap that was greater than General Motors (NYSE:GM)!

 

A funny thing, you say?

 

We think so, too.

 

All the same, Wall Street and Main Street are hot on this ticket, and no one is letting go so fast.

 

Take a look at the chart –

The company’s chart paints a picture of extraordinary exuberance over what we believe is little investment merit.  It’s the ultimate in momentum chasing, really, and where she stops, nobody knows.

 

But a few things can be discerned –

 

  1. First of all, the stock rose roughly 70% in the last four months. That’s a shirt-load, and it stands to reason that we’ll get some bumping and sliding over the next month or so until the moving averages catch up.
  2. Second, regarding those same moving averages, they’re all now unfurled and trending higher, a bullish indication if there ever was one (blue circle). We note, too, that this is the first time since September, 2014 that this condition has obtained.
  3. Strong support is therefore to be had precisely at the level of the unwind – in this case at TSLA 225 (and rising).
  4. Finally, RSI and MACD tell no conclusive tale regarding which way the stock is headed next.

 

We therefore see great opportunity in selling premium over the mid-term in the area of immediate support.  And the details look like this –

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Many happy returns,

 

Matt McAbby

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