A Preview of Tesla Motors Inc. (TSLA) Ahead of the Release After the Bell

Tesla Motors Inc. (TSLA) designs, develops, manufactures and sells electric vehicles, electric vehicle power train components and stationary energy storage systems. The stock is currently trading around $266.10 at the upper end of its 52 week range of $181.40-$291.42. The stock has been out performing the market this year rallying 19.63% year to date. TSLA is scheduled to report earnings after the closing bell today, and the stock is down $0.18 or 0.07% on the session ahead of the close.

Over the past 11 quarters TSLA has rallied on earnings day 6 times with an average move of 8.71%. The stock appears very bullish on a chart going into the release having traded above the Ichimoku Cloud since mid April on the daily bars. Over the past 11 quarters TSLA has rallied on earnings day to the nearest expiration 7 times with an average move of 10.09%. Investors are mainly focused on updates on the new Model X’s time line plays out. The investors are overly bearish predicting a 60 cent loss. With the stock trading above the cloud, great earnings history and a new car in the lineup it is hard to justify anything but a long position in TSLA.

The options market is currently implying a move of around $21.30 or 8% in TSLA by the end of this week giving us targets of $244.80 and $287.40.

Trade: Buy this week’s 282.5-285 Vertical call spread for $0.60
Risk: $60 per lot
Reward: $190 per lot
Break Even: $283.10