According to financial research firm Markit [via CNBC], Tesla Motors Inc (TSLA) has seen a spike in investors betting against it. Citing the most recent short interest data from Nasdaq, which shows short interest in the exchange has risen by 10% ytd, to 2.9% of shares outstanding, Markit notes that TSLA is now the most shorted Nasdaq 100 component.
“On the larger (capitalized) Nasdaq 100, Tesla has seen short interest surge by a third in the last month to 15 percent of shares outstanding,” Simon Colvin, a research analyst at Markit, told CNBC via email. “Tesla is now the most shorted company on the Nasdaq 100”, he added, “after being the fourth most shorted stock a month ago.”
The U.S-based electric carmaker became a stock market phenomenon in the past year, spiking 365% as the company announced plans to expand and introduce a more affordable line-up. TSLA reached an all-time high of $265 in late February, before nosediving 20% to trade at $203.78 at the close on Friday.
While Markit’s data is good news if you’re short on Tesla, longs should keep in mind that despite the recent market meltdown, TSLA is still sustaining a nice uptrend. The 50 and 200 day moving averages at $229 and $179 levels respectively, are acting as solid support, and after some base-solidifying once the market sell off is over, the stock should start uptrending again. If so, it would clearly add significantly to its 36% year-to-date gain. Remember the time-honored principle: in a bull market, buy the dips, not the rallies.