# Why I Bought More Tesla Stock on Friday

Canonical: https://tradersdailydirection.com/why-i-bought-more-tesla-stock-on-friday/

In the [**Sept. 1 issue of** **_Traders Daily Direction_**](https://tradersdailydirection.com/why-i-bought-tesla-yesterday-how-to-trade-along/), I told you I was taking a small position in **Tesla, Inc.** (TSLA) stock.

At the time, TSLA was just starting to break out of an “ascending triangle” consolidation pattern.

I explained that the pullbacks were becoming shallower and shallower...

Volume was decreasing, which meant less supply was coming to market...

And the moving averages had turned upwards...

The short-, medium- and long-term trends were all pointing higher.

And fundamentally, the company was seeing huge growth in both sales and earnings.

All of this created a compelling case for a long trade in TSLA.

But given the stock’s volatility, I decided to test the waters by taking a position that was about half my normal position size.

You can see my first entry into the stock in the chart below.

![](https://lh5.googleusercontent.com/_3YU35JmA7fcCGTzxomkvjH9i2ctRZwuC4vatSrOvwCpVwsYK5ANMQizBl5bAVzcw6MCRM9lWVg9qeYyJpdLsWVnPhhb4DyWtKVIrxM9v9U7vc3LiDarvw5CF6dQmeOFoEE_1Foa=s0)

**_Daily Chart of Tesla, Inc. (TSLA) with Initial Entry -- Source: TradingView_**

So far, the trade is working well. In fact, I just added to it on Friday.

TSLA jumped roughly $35 a share, then [**pulled back to the initial breakout area**](https://tradersdailydirection.com/how-to-handle-the-squat/).

It continued to tighten up, and subsequent pullbacks shrank to a nice and compact 5%.

So, I added to my position when it broke $764.00 and made a new multi-month high.

As of Monday afternoon, TSLA was trading at over $795.00, which equates to a gain of roughly 9% from where I started buying earlier this month.

![](https://lh4.googleusercontent.com/9JWRp7w-BmrhVXHr7HAiLzi4TFfHzB0zK-D_axDgvqPzf1_GJd4TqgVpwjSifRrQd4DbF82sYOEueJL1Ri21FG3CcoWjYQxSKlK9D7bYPTl3iZaHbxKdOeNcUbBCB7zZQr7GhlSp=s0)

**_Daily Chart of Tesla, Inc. (TSLA) with First & Second Entry -- Source: TradingView_**

Right now, my stop is at $718.60. This gives my position plenty of wiggle room in case there is another pullback.

But if TSLA continues its [**surging breakout**](https://tradersdailydirection.com/the-four-big-breakout-commandments/), I will likely raise my stop to $744.25 to protect my profits.

As you can see, taking a partial position like this is a good way to trade a volatile stock.

It allows you to build up a small profit, which you can use to “finance” the risk.

And it allows you to add on to your initial position only once you are profitable.

I do the same thing with other volatile stocks like **GameStop Corp.** (GME) and **AMC Entertainment Holdings, Inc.** (AMC), which I told you about back in the [**Aug. 19 issue of** **_Traders Daily Direction_**](https://tradersdailydirection.com/the-mother-of-all-meme-stocks/).

I’ll follow up on my AMC trade and explain how it played out for me in a future issue, so stay tuned!

Embrace the Surge,