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Tesla Enters Its Most Bullish Window: This Seasonal Trade Delivered 24% Average Gain Over 10 Years

Benzinga · 05/21 16:13

Tesla Inc. (NASDAQ:TSLA) just entered its strongest historical performance window of the year.

A strategy of buying Tesla shares on May 21 and selling on July 18 — or the nearest trading days — has delivered an average return of 24.3% over the past decade, with a perfect 10-for-10 track record of positive outcomes.

Tesla Is Shifting Into High Gear

According to data from Seasonax, the period between late May and late July is historically the most lucrative time to hold Tesla stock, with an average gain of 24.3% over the past 10 years.

Even more remarkably, this trade has been profitable in every year of the past decade, with a 100% win rate.

Start Date End Date Profit % Max Rise Max Drawdown
May 21, 2015 July 20, 2015 +14.9% +14.9% 0.0%
May 23, 2016 July 18, 2016 +4.6% +8.9% -10.7%
May 22, 2017 July 18, 2017 +5.8% +23.6% -2.1%
May 21, 2018 July 18, 2018 +13.8% +30.4% -3.3%
May 21, 2019 July 18, 2019 +23.6% +24.3% -12.7%
May 21, 2020 July 20, 2020 +98.5% +98.5% -2.6%
May 21, 2021 July 19, 2021 +11.3% +18.6% -1.4%
May 23, 2022 July 18, 2022 +6.9% +14.8% -6.9%
May 22, 2023 July 18, 2023 +55.3% +55.3% -3.2%
May 21, 2024 July 18, 2024 +33.6% +41.1% -8.5%

Even when excluding the extraordinary 98.5% gain in 2020, the average return remains an impressive 18%.

While Tesla's early summer trade has delivered consistent gains over the past decade, not every year was a blockbuster.

The lowest gain occurred in 2016, when shares rose just 4.6%, and the second weakest performance came in 2017, with a 5.8% return.

Notably, intra-period drawdowns have been rather modest with only two occasions showing double-digit temporary drops.

In 2016, Tesla saw a temporary decline of 10.7% between May 23 and July 18, while 2019 witnessed a 12.7% intraperiod drop before recovering.

Despite these pullbacks, Tesla always closed the window in positive territory, highlighting the strength and resilience of this seasonal pattern even in choppier conditions.

Technical Analysis Points To Further Upside

Bank of America technical strategist Paul Ciana turned bullish on Tesla, highlighting strong momentum and a potential technical breakout:

"TSLA bottomed in the $200s with a bullish breakaway gap up into the $300s. Momentum and relative trend favor upside into the $400s. The triangle pattern still measures upwards of $700," Ciana said in a note shared Wednesday.

With Tesla currently trading well below its all-time high of $488, the technical setup and seasonal pattern may align to offer traders a high-conviction window.

And this time, Elon Musk is back aboard.

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Image created using artificial intelligence via Midjourney.