Following up on last week's 2025 Stock of The Year post, TSLA is reporting earnings on Wednesday, opening a potential buy-in window no matter how the stock reacts. Since my price target is 3X to 5X on the shares over the next couple of years, there is no need to discuss what to do on a hard gap-up, just buy and don't worry about timing. However, in the event of some bearish market reaction to this earnings report, or prayers will have been answered.
Take a look at price reaction to about the past three years of earnings reports on the TSLA chart below, and note how often buying TSLA in the month after earnings-dips were bad times to buy shares (hint: almost never).
Here is an excerpt from the Blue Line Trading System Weekend Update from Saturday day:
"Elon Musk made a big bet on Donald Trump going into the election and as a result, TSLA shares soared from $250 on Nov 5th to a high of $488 on Dec 18th. That's a gain of 95%. TSLA is sitting at $407 this weekend before release of 4th quarter 2024 earnings, a retracement of 34% of that post-election gain, very close to a Fibonacci 38%. Close enough for an earnings rally, or, is more correction ahead? We will take our cue, not from a knee-jerk reaction after-hours on Wednesday, but on how TSLA settles out next week. Going into earnings, I'm erring on the side of holding TSLL calls, but not nearly as many as I may be holding a week from now. To be continued."
On the chart above, that Wave (iv) is a earnings wild card. It may or may not be over, but in the larger pattern recognition universe, it represents just a small degree dip of a third wave at multiple degrees of trend, one that has much higher price aspirations in the weeks and months ahead. I've added a shaded rectangle that indicates the probably extent of Wave (iv)'s retracement of Wave (iii), which may already be finished, and of not, a bad reaction to an earnings report will just send in completion to somewhere within the Fibonacci zone. When over, TSLA will soar out of the area of retracement and on toward the price projections set out in the chart, $670 to $860 and upwards toward $1,200 in the months to years immediately ahead.
Bottom Line
Ignore Wednesday's earnings, unless they result in another buying opportunity on the road to Tesla becoming the most valuable company on the planet.
