There’s always a lot to read on a company’s earnings report. Tesla Motors (TSLA) fared well with a strong earnings and sales beat. And the company disclosed that it sold some of its Bitcoin position at a profit, making over $110 million there—or more than it’s made from selling cars in its existence.
Yet even with strong earnings numbers and a solid return on cryptocurrency trading, shares sagged a bit.
Looking out over the longer term, shares appear to be setting up for a bigger move ahead. The company earned 93 cents per share, against estimates in the $0.75-0.80 range. And sales topped $10.4 billion. Revenue rose by 74 percent.
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While production is going fine, some automotive parts shortages may impact the upcoming quarters, and the company reported that it weathered the chip shortage so far.
Action to take: Shares are well off their speculative highs from earlier in the year. It appears that shares are consolidating for a move higher. That may play out in a few weeks, or it may take longer, given concerns over parts shortages. Investors could look to start accumulating shares here.
For traders, a possible sideways pattern could lead to income generation from a trade like a put sale. The July $600 put, currently going for about $30, could be sold, adding $3,000 in cash to a trader’s account. As long as shares remain over $600 at expiration, that could be used to create some modest cash. If shares are under $600, traders would be in at $570 per share, a steep discount to the current price in the low $700 range.
Disclosure: The author of this article has no positions in the stock mentioned here, but may make a trade on this company after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.