Tesla short sellers suffered losses in the billions of dollars following the stock's winning streak.
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Tesla Inc. (TSLA) has been on a tear recently, to the detriment of short sellers. As of June 14, 2023, Tesla’s Aroon Indicator signaled a bullish trajectory, leading many to predict that the electric vehicle giant’s stock price is likely to continue its upward trend. If the projections hold, Tesla short sellers, who have bet against the company's stock, stand to lose billions.
The Aroon Indicator Gives a Bullish Signal
Named after the Sanskrit word for 'dawn's early light,' the Aroon Indicator, developed by Tushar Chande in 1995, is used by traders to predict if a particular security is trending, and how strong that trend is. The bullish signal from the Aroon Indicator for Tesla indicates the likelihood of the stock's upward move.
On June 14, 2023, the Tickeron's A.I.dvisor detected that Tesla's AroonUp (green line) was above 70, and the AroonDown (red line) was below 30. This specific pattern often signifies a bullish setup, suggesting that traders might want to consider buying the stock or purchasing call options.
In past instances where the Aroon Indicator showed a similar pattern for Tesla, the stock generally moved higher in the following days. According to the A.I.dvisor, the stock moved upwards in 268 out of 295 similar occurrences, giving the bullish signal an impressive success rate of 90%.
The Implications for Short Sellers
This anticipated upward trajectory is not good news for Tesla's short sellers. Short selling is an investment strategy where investors borrow shares of a stock to sell them with the hope of buying them back at a lower price later. If Tesla's stock price continues to rise, these short sellers could stand to lose significant amounts of money.
In recent years, Tesla's stock has been a popular target for short sellers, who have questioned the company's high valuation compared to traditional automakers, as well as potential profitability and production issues. But as Tesla continues to defy these skeptics with its stock price performance, these short sellers find themselves in an increasingly precarious position.
The latest bullish signal from the Aroon Indicator adds to a series of positive developments for Tesla, as the company continues to surge ahead in the electric vehicle market. This reinforces the idea that betting against innovative companies such as Tesla can be a high-risk proposition.
However, short sellers have been known to weather through turbulent times, and they might hold their positions with the hope that the tide will eventually turn in their favor. Yet, given the strong indicators for Tesla's stock price rise, they might find themselves under more pressure than ever to reevaluate their positions. As the electric vehicle market continues to expand, Tesla's short sellers could potentially find themselves in a deepening hole, if the stock's winning streak continues.
TSLA's RSI Indicator recovers from oversold territory
The RSI Oscillator for TSLA moved out of oversold territory on March 19, 2025. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 27 similar instances when the indicator left oversold territory. In of the 27 cases the stock moved higher. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on March 24, 2025. You may want to consider a long position or call options on TSLA as a result. In of 79 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for TSLA just turned positive on March 20, 2025. Looking at past instances where TSLA's MACD turned positive, the stock continued to rise in of 44 cases over the following month. The odds of a continued upward trend are .
Following a +1 3-day Advance, the price is estimated to grow further. Considering data from situations where TSLA advanced for three days, in of 341 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 66 cases where TSLA's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where TSLA declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
TSLA broke above its upper Bollinger Band on March 25, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for TSLA entered a downward trend on March 20, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 83, placing this stock slightly better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. TSLA’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating slightly better than average sales and a considerably profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (8.905) is normal, around the industry mean (6.202). P/E Ratio (40.726) is within average values for comparable stocks, (17.826). Projected Growth (PEG Ratio) (2.067) is also within normal values, averaging (5.723). TSLA has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.042). P/S Ratio (6.305) is also within normal values, averaging (77.712).
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a manufacturer of electric sports cars
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