The tit-for-tat measures keep coming as the trade war ramps up.
Canada is placing retaliatory 25% tariffs on a range of U.S. goods, including aluminum and steel, sporting goods, computers, and cast-iron products.
The European Union (EU) returned fire too by slapping a 50% rate on U.S. goods like motorbikes, motorboats, and even American whiskey.
More will follow next month on beef, poultry, and other agricultural products.
In the EU’s case, those tariffs are strategic… In the main, they’re targeting companies and farmers in Republican-held states.
Yet trying to put a dollar value on the impact is nigh impossible when the landscape is changing so quickly.
So rather than getting bogged down in the turmoil, I’ve been focusing on trading opportunities. My subscribers have enjoyed a winning spree in 2025 so far.
Today, I want to share the latest trade we did on Tesla (TSLA) that resulted in a handy return in just a couple of days…
Keep Banking Winners
Tesla surged higher after President Trump’s victory.
After gapping up, TSLA consolidated in late November before surging in December. In about a month and a half, TSLA gained 98% from just before the election… And it saw its market cap briefly push through $1.5 trillion.
But as the chart below shows, TSLA soon reversed sharply and became stuck in a downtrend…
Tesla (TSLA)
Source: e-Signal
That peak and reversal on December 18 coincided with the Relative Strength Index (RSI) forming an inverse “V” and retracing from overbought territory (upper gray dashed line).
TSLA continued its fall as the RSI slipped below support (green line) and into the lower half of its range. The 50-day moving average (blue line) also rolled over and headed lower.
By the time TSLA sank 15% on Monday, it had lost more than half its value since its December peak. Elon Musk’s fortune sank by an estimated $126 billion.
However, my signals told me that TSLA’s down move was overdone for the moment, with the RSI tracking further into oversold territory (orange circle).
Plus, that sharp pullback had brought TSLA back to the level where it had found support and rallied back in October (horizontal brown line). That level had also acted as price support when TSLA was consolidating from July onward.
So we bought a call option on Monday to capture a potential bounce. A call option typically increases in value when the underlying stock rallies.
That played out just as expected. As the chart shows, the RSI formed a “V” and started to track higher.
Take another look:
Tesla (TSLA)
Source: e-Signal
After rising on Tuesday, TSLA gapped higher on Wednesday. Then the price action started to stall.
So we sold our call option that day for a 23.0% gain – a handy return in just two days.
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Options Are Perfect for Churning Markets
As you can see, in this market you have to act quickly. But when you do, you can really benefit from the churn in this uncertain market.
This TSLA trade is just one in a run of profitable trades. This week alone, we’ve generated gains of 46.9% and 28.4% (on NVDA and MSTU) in addition to this TSLA trade in The Opportunistic Trader.
And if you’d like to join us, you can learn how we can use options to turn out wins in as little as a day in my recent presentation right here.
As always, we generated these returns using options. Because options use leverage, they magnify both losses and gains.
And because options have a finite life, you have to get the move you’re looking for before they expire.
Yet as this trade shows, when the market is in turmoil, you can profit when you look beyond all the noise and focus on finding strong trade setups.
And as I mentioned above, you just have to be nimble and take your profits when you see them.
Regards,
Larry Benedict
Editor, Trading With Larry Benedict