Wall Street Veteran Says Tesla Stock Is About To Fall, And $550 Million Agrees

What Happened

Most retail investors might not know Carter Worth, but Wall Street does. He is a 35-year market veteran and founder of Worth Charting, a regular CNBC guest and co-host of Options Action.

Big investors look more bullish, but that data lags. Filings show institutions added a net 226 million shares last quarter and lifted their share count by about 31%, yet those figures are still weeks old and reflect a late-June snapshot, not real-time ownership.

The Tesla stock bull case has not gone quiet. Through July, UBS, RBC, and Roth Capital, all Wall Street investment banks, lifted their TSLA price targets.

Jim Cramer, the CNBC Mad Money host and former hedge fund manager, also told investors to trim big tech before this week’s earnings.

Market Context

With Tesla earnings scheduled for tomorrow, July 22, a veteran chart analyst says TSLA stock is set to fall, and the options market just backed him with a roughly $550 million bet against it.

Carter Worth is an American financial expert, famously known as “Chart Master” on CNBC. Worth’s projection on Tesla stock is backed by market data. Money flow has turned negative and traders are hedging, even as Wall Street keeps raising its price targets.

The options market agrees, as traders placed a roughly $550 million bet against Tesla into the print, and implied volatility sits in the 78th percentile of its past year. It is a sign the market is braced for a large move.

The put/call volume ratio, which rises as traders buy more puts than calls, climbed from 0.54 to 0.74 in two weeks.

They also carry caveats. The value of those holdings fell more than $1 billion even as the share count rose, because the price slid faster than institutions bought. The flow was far from one-sided either, with 2,160 sellers against 2,880 buyers.

Here is the catch. Tesla already reported record second-quarter deliveries, so that number is priced in, and the print now hinges on profit margins and robotaxi guidance.

So Wednesday’s report decides whether the higher targets are right or the market agrees with the 35-year Wall Street veteran.

Why It Matters

Why a Delivery Beat May Not Be Enough for Tesla Stock

History warns that even a beat may not lift the stock. Tesla has missed earnings in two of its last four quarters, and both recent beats were sold on guidance. Last quarter’s report is the clearest case, as an earnings beat still sank the stock to a 52-week low once management flagged heavier spending.

Details

The Veteran Sees Tesla Falling

This week, Worth told CNBC that Tesla’s chart points to a decline ahead.

The hedging is building too.

Money Flow Has Already Gone Cold

Worth’s chart call has support under the surface. Chaikin Money Flow (CMF), a proxy for institutional flows, has fallen since March and just dropped below zero, which shows sellers now control one of July’s most-watched stocks.

Analysts Keep Raising Targets Anyway

And back in June, JPMorgan raised its target from $145 to $475 as it warmed to the robotaxi story. They have not changed the target as of yet.

However, the ratings never followed. Nine of 18 top analysts still sit on Hold, and the range stretches down to Wells Fargo’s $130 sell call, so Worth is far from the only doubter.

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