SpaceX IPO steals Tesla's thunder — buy the dip on Tesla
Thesis
SpaceX just went public in the biggest IPO ever, and a lot of investors sold their Tesla shares to get a piece of it. This created a temporary dent in Tesla's stock price. However, SpaceX's own executives have hinted that a closer tie-up between the two companies 'might make Elon's life a little easier.' Once the SpaceX hype settles, Tesla's stock could easily bounce back as investors refocus on its actual business and the potential benefits of working closer with SpaceX.
Strategy approach
Build a mean-reversion strategy on TSLA using the daily timeframe. Entry: go long when the stock is oversold, specifically when RSI(14) drops below 40. Exit: close the position when RSI(14) crosses back above 50, or after a maximum hold of 10 trading days. Use a 5% stop loss for risk management.