As Trump-Musk 'Theater' Drives Tesla Lower, Here's the Price Where I'm Buying
This is my strategy for trading Tesla stock right now. Plus, my wild theory: Was it all staged?
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Never forget that Elon Musk is a joker.
Remember when Musk challenged Mark Zuckerberg to a fight? At first it was hard to tell if he was serious about engaging in fisticuffs with the Meta Platforms META founder. Eventually, it became apparent that he was only kidding.
He famously hinted at buying his own company at $420 per share, an inside joke about marajuana. The government agency that Musk helmed, the Department of Government Efficiency, or DOGE, slyly references a crypto coin often associated with Musk.
Not a Hero, but Less of a Villain
By distancing himself from President Trump, Tesla TSLA CEO Elon Musk can broaden his appeal among the left — the group that currently dislikes him the most, but also the group that is most likely to purchase a Tesla.
According to a 2024 article by Car and Driver, Tesla’s Model Y is the most popular vehicle in Arizona, California, Colorado, Delaware, Nevada, New Jersey, Utah, Virginia, and Washington.
In other words, Tesla’s greatest popularity is in mostly, but not exclusively, blue states. By positioning himself against Trump, Musk becomes less of a villain in the places where he is likely to sell the greatest amount of EVs.
Is This a Buying Opportunity?
Shares of Tesla were hammered for a 14.26% loss on Thursday, as Trump indicated Musk could lose some government contracts.
On Thursday, the stock fell into the $285 area. That level marked an earlier breakout from a rounded bottom pattern (shaded yellow). This created a minor buying opportunity, so we entered a small long position in that area (point A).
At the same time, we’re keeping plenty of dry powder for the major opportunity that would occur if Tesla were to fall to the lower end of that pattern (green line). Should the price get there, the area near $215 (point B) would be an attractive place to add to our position.
Is It Theater?
Trump and Musk agree on many issues, with Trump’s so-called Big Beautiful Bill being a major exception. Musk has indicated that the bill can’t be both big and beautiful, and the spending enabled by it should be significantly reduced.
That said, Thursday’s battle on Musk’s social media platform X was so entertaining that it almost felt staged. Is it possible that Trump and Musk agreed to nuke each other in public, while still working together behind the scenes? If so, Trump just did Musk and Tesla a huge favor.
At the time of publication, Ponsi was long TSLA.
