JC Parets: 'I Don't Trust Tesla' Breakout
Eagle Bay Capital Founder JC Parets said exclusively on Benzinga's #PreMarket Prep that he doesn't trust the Tesla Motors Inc (NASDAQ: TSLA) breakout over the past few trading sessions. In the past five days, the stock has gained more than 5 percent, most of which happened during Wednesday's trading session.
Parets bases his opinion on experience that stocks with flat 200-day moving averages typically tend to experience false breakouts. At present, the Tesla 200-day moving average is at $216.94.
Parets said that the simple fact that Tesla's moving average is flat means that he will stay away – it is a deal-breaker. Put simply, Parets said that "rallies tend to fail." He added, "You have to stick to your [trading] system."
Looking At Tesla Differently
After experiencing pressure on the stock throughout the first quarter, Tesla has rallied to show gains of 17.6 percent on the year. At one point, the stock had fallen more than 15 percent this year. Since January 2014, Tesla has gained more than 73 percent, as the company has expanded production and, more recently, announced its home battery.
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