Short-Term Options Recommendation

Jay L.
Aug 26
2 min read

Short-Term Options Recommendation

Date: This week (next few sessions)

Position Allocation:

Index exposure: 15% long
TSLA: 85% long

Market Observation

Today, all three major indices closed lower, yet TSLA finished +2%, showing clear buying pressure. Despite the late-day selloff across the market, TSLA held firm, indicating strong institutional support. Last week, TSLA pulled back to the ~$315 support level, successfully held, and then rebounded sharply with the market. It has now returned to the prior resistance zone and is positioned for a potential breakout.

Momentum Logic

Relative strength of TSLA versus the market is evident:

Market rallies → TSLA rallies
Market trades flat → TSLA still rallies
Market dips slightly → TSLA rallies
Only when the market suffers a sharp selloff does TSLA decline

This pattern suggests TSLA is currently being driven by strong active inflows and demand.

Trading Plan

Key Levels
- A breakout above $350 would likely trigger momentum buying, with an immediate upside potential of 2%–3%.
- If $350 fails to break, step aside and wait for confirmation with market support before re-entering long.
Profit-Taking Strategy
- On a 3%–4% move higher tomorrow, lock in 50% of the position to secure gains, while holding the remainder for continuation.
- If TSLA and the broader market continue higher, consider hedging with short-dated puts to capture pullback opportunities.
Risk Management
- If the market opens flat or fails to move higher → exit all index exposure, hold only TSLA.
- If TSLA trades lower → cut the entire position and move to the sidelines.

Strategy Summary

The market is currently in a choppy upward trend, not suited for one-directional heavy positioning. The right approach is intraday following + flexible switching. Core logic remains Buy the Dip, focusing on breakout trades while managing position sizing dynamically.

Trading Philosophy: “There is only one side of the market and it is not the bull side or the bear side, but the right side.” -Jesse Livermore