In With This, Out With That (TSLA, DGLY)

There's no denying Tesla Motors Inc. (NASDAQ:TSLA) has been one of year's top investment stories, with shares running up from less than $40 to more than $194 in just a few short months. But, as one might imagine, that 385% runup from TSLA creates something of a disconnect between the company and its share price. Time to head for the exit. Instead, a better use of that now-considerably-greater capital is a position in Digital Ally, Inc. (NASDAQ:DGLY) ... a stock that's also had a pretty good 2014, but has suffered more than a small setback since mid-September. Specifically, DGLY has pulled back from a peak price of $17.47 to a low of $9.88 as of Friday. But, it looks like that correction may have already come to an end.

First and foremost, know that neither of these calls on TSLA or DGLY are long-term outlooks, nor judgment calls on the merit of either company. Tesla Motors remains one of the coolest (and only viable) electric vehicle manufacturers out there, and though Digital Ally makes some of the best security-related technology in the world, it's not as if the company is bulletproof. On the other hand, the brewing moves from either of these stocks could be too big for even long-termers to simply ignore, miss, or ride out.

The red flags for Tesla Motors may be simple, but sometimes the simplest clues are the most reliable. Specifically, TSLA shares have now logged two lower highs while also en route to two lower lows. During this time, the stock has also rocked its way not only under the 20-day moving average line (blue), which had been support all during the rally, but also under the 50-day moving average line (purple) as of last week. In fact, though it looked as if TSLA might have fought its way back above the 50-day moving average line late last week, with today's weak open it's become clear the bulls just don't have what it takes to push this rock up the hill again, now that so much technical damage has been done; there's a lot of "white space between $168 and $99 too, pulling the stock lower.

As for Digital Ally, yes, it may be in the red today after reversing course from a strong open. But, the bulls seem to have tipped their hand on Friday by brushing the key 100-day moving average line and immediately reversing course. Better still, even with today's pullback from DGLY - and maybe even more so because of it - the chart has made it clear it's holding the line at the 100-day moving average line at $10.40.

Again, neither of these calls is a long-term call. They're just trading calls, so don't get married to in Digital Ally, Inc., and don't plan on holding a bet against Tesla Motors Inc. for too long either. But, both potential moves are big enough to note, worry about, and even act upon.

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