Shares of Tesla (TSLA) fell 1.30% two weeks ago, after the EV giant reported mixed third-quarter results. Elon Musk’s company said overall revenue rose 12%. It reported that net income fell 37% to $1.4 billion.
That could be a sign that both the Direxion Daily TSLA Bull 2X Shares (TSLL ) and its bearish counterpart, the Direxion Daily TSLA Bear 1X Shares (TSLS ), are worthy of consideration by risk-tolerant traders with short-term time horizons. The case for TSLS could boil down to a 3Q rush into EVs by consumers ahead of a federal tax credit expiration. That expiration has long been seen as a catalyst for sales of those vehicles.
“Bears can take solace in the beat on [deliveries. That’s because] this surge can be largely attributed to consumers rushing to purchase new EVs before the tax credits expired,” said Ryan Lee, senior vice president of product and strategy at Direxion. “This one-time push could weaken sales into both next quarter and next year.”
TSLL Could Have Its Day, Too
The expiring EV tax credit could weigh on Tesla automobile sales, potentially boosting TSLS along the way. But it’s hard to deny there’s a longer-ranging bull case for the company. It’s one that could bring myriad opportunity for aggressive traders to capitalize with the bullish TSLL.
As Direxion’s Lee pointed out, much of the rally by Tesla shares since the start of September is attributable to investor expectations pertaining to the company’s robotaxi effort and AI plans. Tesla is already a member of the Magnificent Seven. Some market observers argue the company should be viewed through the lens of AI, not automobile sales.
On the company’s earnings conference call, Musk referred to Tesla “as the real-world leader in [AI. He] set the tone to reinforce to investors that TSLA is not an auto play, but rather an AI one,” noted Lee.
Lee also pointed out that data to this point on Tesla’s robotax progress and Optimus AI project is limited. But he also mentioned Musk’s controversial pay package is a clear sign he’s betting on himself and this company to make significant progress on those fronts. If he’s right, the share price is going up. That would be good news for TSLL traders.
If robotaxi and Optimus progress come to pass, it’s possible any post-tax credit steadiness in EV sales would be icing on the cake for Tesla investors and TSLL traders.
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