Papafox's Daily TSLA Trading Charts

[Stormy]

Thanks for the detailed explanation @neroden.

I took a quick poke around to see if I could buy some of the convertible bonds myself, and just couldn't figure out how. I saw some reports that say they were trading at 90% yield. That sounds stupidly cheap to me. I'm guessing that doesnt include the conversion option value.

If anyone knows how to buy the Feb convertible bonds, let me know, I'd love to do the math on that and maybe get in on that party too.

 

[neroden]

Get the CUSIP number of the bonds. Phone your broker and ask for the convertible bond desk. Be prepared to buy no less than $100,000, they don't usually want to fool around with smaller bond purchases.

 

[Papafox]

In a nutshell, today was a particularly low volume day for TSLA in which the NASDAQ traded down by over 1.5%, shorts did their best at manipulating but even with the bad macros lost control of the SP.

The day began with a spirited MMD, courtesy of you know who. When the MMD was defeated, TSLA climbed into the green to celebrate, but bad things can happen to the SP when it is high in the morning of a weak macro or news day, and shorts managed another dip below 348 about 2:00pm during the normally low trading volume hours before the stock price recovered and oh so briefly touched green before closing slightly in the red.

Looking at the sharpness of the dips and recoveries, you can pretty much tell that short manipulators were indeed working the stock today, and volumebot.com confirms that fully 58.81% of FINRA reported selling was tagged short.

The story for the end of the day belongs to the TSLA Options Volume chart above. You can see that LOTS of puts and calls with strike 350 expired on Friday, and even more 352.5 calls expired, as well. The best small move for market makers and other sellers of the options in the final minutes of trading would be a pin at 350, but anywhere between 350 and below 352.5 would be good too. Our close at 350.51 is consistent with a little price nudging by the option sellers right before close.

This week, Ihor Dusaniwsky stated that the shorting going on at TSLA doesn't much affect the pricing of the stock. I couldn't disagree more strongly. The manipulations are well documented here. Further, the deep dips this stock takes on no news of significance is often caused by short-sellers buying in as TSLA is decreasing or nearing a low. Selling to establish a position when the stock price is low and then buying back at a high price when margin calls come is not only a formula for losing money but also for destabilizing the stock, both on the way down and on the way up. Not many of my friends can stomach the volatility of owning TSLA, and much of that volatility is caused by the techniques used by the shorts. Trust me, if investors are continually giving up on trading this stock, that will indeed affect the price. Certainly there are wounds inflicted by Elon, too, but those are hopefully behind us now. Fortunately, the last dip is far enough in the rear-view mirror so that TSLA will attract new investors in the coming week.

Looking at the technical chart, you can see lots of headroom for TSLA to climb once a catalyst propels it.

How has TSLA done since bottoming out on October 8, compared to the NASDAQ? Well, the NASDAQ is down 4.2% since then, and TSLA is up 40%. I would say that relative to the market, TSLA continues to show great strength, particularly after already climbing this much.

For the week, TSLA closed at 350.51, up 4.10 from last Friday's 346.41.We conquered 348 this week in brutal fighting, and I'm not going to accept it being behind us until we get a bit more breathing room. Notice how many times during the past 10 days TSLA touched or approached 348 at some point during the trading. The past three weeks have included climbs of 70.90 , 15.51 , and 4.10. Obviously, the pace of climbing has reduced, but that's still 90.51 in three weeks. We've been running up on the Q3 ER data. At some point after we cross the mid-point of the quarter this week, indications of a good 4Q ER will focus their tractor beam on the stock and start lifting us higher. Can't wait!

Conditions:
* Dow down 202 (0.77%)
* NASDAQ down 124 (1.65%)
* TSLA 350.51, down 0.89 (0.25%)
* TSLA volume 5.1M shares
* Oil 60.73, up 0.54 (0.90%)
* Percent of TSLA selling by shorts: 58.81%

 

[Papafox]

Still a few hours away from getting today's analysis up, but here's what I've been up to lately:
Tesla's Upcoming Inclusion In The S&P 500 Index | CleanTechnica

 

[Papafox]

Today was a classic low volume/holiday trading day that was impacted by either FUD or bad macros. Today it was bad macros. The NASDAQ closed down nearly 3%, and it was the worst kind of a down day, which is a descent throughout the day without a rebound at the end. This is an easy setup for profitable manipulations by shorts, and looking at the 54.59% selling by shorts today, they were busy. Think 4th of July week and you get the picture.

Take a look at the final hour and ten minutes of trading. Until then, TSLA had been more resilient than other tech companies, but here we saw what appears to be very deliberate stairsteps downward, and this being a holiday, the usual day traders weren't standing ready to catch the fall. More than 65,000 shares traded hands in the final minute of trading, suggesting plenty of opportunity for some of the manipulators to cover profitably at day's end.

The good news is that volume was light. The problem wasn't so much that longs were selling, it was instead that longs aren't buying until either some news comes forth or the macros calm down a bit.

Other tech stocks fell similarly to TSLA, which is a change because TSLA has been weathering the storms better than other tech stocks in the past. I suppose the resilience of TSLA in the past set it up for a fall with this continued pressure from macros. We're still more than a month and a half away from announcing Q4 production and deliveries, and the positioning for the coming likely good news has not begun yet. AAPL was down 5% today while NVDA was down nearly 8%.

What would bring the market back to green would be progress with the China tariffs or any word from the feds that they might consider slowing the pace of interest rate hikes. The decreased price of oil we're seeing (now below $60) suggests inflation is not a big threat. Let's see how things unfold.

The NASDAQ closed down 2.78% today

Shorts sold 54.59% of TSLA today, suggesting that a good amount of manipulating was present

Conditions:
* Dow down 602 (2.32%)
* NASDAQ down 203 (2.78%)
* TSLA 331.28, down 19.23 (5.49%)
* TSLA volume 6.9M shares
* Oil 59.19, down 0.74 (1.23%)

 

[Papafox]

What a difference a day makes. TSLA today recovered somewhat from yesterday's big dip that was caused by bad macros and some help from short-sellers. Today, TSLA began the day following the NASDAQ fairly closely, but as the afternoon fade of the NASDAQ evolved, TSLA mostly held its ground. The result was a NASDAQ that closed at almost exactly the opening price while TSLA ended the day up 2 and a quarter percent. I think the market realized that TSLA dipped too far yesterday (although most might not realize the role played by short-selling) and buyers materialized to take advantage of these attractive prices after the recent 350s.

Checking out the after-hours trading, you can see that TSLA added 1.37, suggesting there might be additional buying pressure tomorrow.

Looking at the NASDAQ's progression from a high around 11am until a close with about zero gain, you can see that shorts who were selling on the way down and then recovering could potentially make a nice profit if TSLA followed the NASDAQ down. It didn't.

Shorts did 60.95% of TSLA selling today. With such a high percentage of sales tagged "short", they certainly did their best to defeat the recovery TSLA staged today. Such a high level of short manipulations and such a low success rate suggests longs are not interested in selling at these prices and thus we could indeed see continued recovery of the SP.

Looking at the tech chart, you can see that the blue 50 day moving average line is now angling up nicely toward the 200 DMA line. A golden cross, when it happens, will delight the technically-based traders. Yesterday's dip was a big one, but put in the context of trading since Oct 22, it's not a serious challenge to the rally. Remember the corrections we saw in 2013. Notice, too, how low the volume has been lately, also suggesting that longs are holding and waiting, which by the way, we should be doing too (unless you are buying). I did pick up a few shares to round out the numbers in an account today.

Hoping tomorrow's macros are decent because TSLA looks like it has its mojo back today.

Conditions:
* Dow down 101 (0.40%)
* NASDAQ up 0 (0.00%)
* TSLA 338.73, up 7.45 (2.25%)
* TSLA volume 5.3M shares
* Oil 55.74, up 0.05 (0.09%)

 

[Papafox]

The big question yesterday was whether TSLA has its mojo back again. The answer is a definite YES. Today was yet another low volume day with lots of the stock's selling attributable to shorts. The longs aren't selling, many new longs aren't buying until they see macros settle down, and the shorts are doing their mischief. Today was one of those days when we see the NASDAQ start high and descend for most of the day, making TSLA a relatively easy prey for short-selling on the way down and covering at the bottom. Alas, The NASDAQ bottomed out about 2:00pm, but when TSLA hit the red/green line about 11am (same as the NASDAQ), it started climbing, which led to a couple hours of whack the model until TSLA started climbing decisively away at 2:00pm (along with the NASDAQ climb). Sure enough, the NASDAQ dip after 3:30pm or so led to a muted dip with TSLA.

Shorts likely made money in the morning but lost it in the afternoon on any attempted manipulations.

Overall TSLA clearly outperformed the NASDAQ today, even though TSLA traders were keeping a close eye on the NASDAQ. With the NAS down nearly 1% and TSLA up more than 1.5%, TSLA showed strength. The reason for this strength is likely the unrealistically deep dip TSLA took on Monday and the unwinding of that dip continued today, as with yesterday.

The NASDAQ again started high and fell for most of the day, making a difficult trading environment for TSLA. Alas, TSLA performed well, nonetheless.

Volumebot.com says TSLA shorts were tagged with 55.19% of sale trades today

Looking at the technical chart, most of Monday's crazy dip has been erased by Tuesday's and Wednesday's trading. The quickness with which the dip is being reversed should make another dip of this type more difficult. Shareholders are more likely to hold then sell, knowing what they do now about the stock's resiliency.

Conditions:
* Dow down 206 (0.81%)
* NASDAQ down 64 (0.90%)
* TSLA 344.00, up 5.27 (1.56%)
* TSLA volume 5.0M shares
* Oil 55.94, down 0.31 (0.55%)

 

[MaryAnning3]

Awesome post. So what is the bottom line? Are you saying buy, hold?

 

[oneday]

Awesome post. So what is the bottom line? Are you saying buy, hold?

 

[Papafox]

TSLA's performance this week suggests limited downside risk. Longs aren't selling after a dip like Monday's and enough buyers are taking advantage of any dip to add shares so that we see a bounce back. I would say adding now rather than later is a reasonable strategy if you wish to be higher in shares come 4Q delivery/production numbers and ER/CC. The problem with trying to time the run-up is that it is so hard to do. All of a sudden there's a tweet or an analyst's visit to Fremont and Zam! TSLA has taken off. The big risk right now is macros, and TSLA is more closely linked to macros in recent weeks than before. Overall, though, I see 4Q results as propelling TSLA to a new ATH and beyond. The bear thesis that Q3 was a one-time anomaly will be debunked. The biggest risk is always trying to time things too closely and buying call options that expire too soon. My calls are J20s now and I feel lots of wiggle room with those so that they should produce profits even if there's a short-term surprise. Shares are safer, of course. With Tesla moving into a profitable long-term operation, I don't envision TSLA substantially cheaper than it is today. Do your own research and decision making, I am just relaying what I am doing.I did most of my option buying in the 248-270 range, so I am comfortable riding out the bumps in the short term.

 

[John Beans]

View attachment 350756
I marvel when educated people suggest that short-sellers have no real effect on the TSLA stock price.

Whereas I always marvel that grown adults believe in "technical trading," and "reading tea leaves," and "tarot cards," and "palm reading."

 

[SpaceCash]

Whereas I always marvel that grown adults believe in "technical trading," and "reading tea leaves," and "tarot cards," and "palm reading."

All of these things have value, in that they reveal much about the readers themselves.

Raw predictive power? Yeah I'm with you

 

[jackbowers]

Does anyone else find this interesting? I have often wondered if the brazen behavior by the shorts stems mainly from the valuation disparity between Tesla stock and Tesla bonds. I have also wondered if the shorts' high confidence in their own strategy would be undermined if Tesla bonds began to rally.

IB Traders’ Insight | Interactive Brokers - Examining the Differences Between Tesla's Equity and Bond Prices | Interactive Brokers

 

[EVNow]

My calls are J20s now and I feel lots of wiggle room with those so that they should produce profits even if there's a short-term surprise.

Do you roll forward immediately or sell on intraday high wait for low to buy ?

 

[Papafox]

Today was a very positive day for the macros and a very low volume day for TSLA. Again, no one has incentive to sell. Although the NASDAQ dipped a bit at 10:00am, we saw a very substantial dip of TSLA at that time, structured in the sharp icicles which characterizes significant short-seller amplification of the dip. As the NASDAQ climbed, TSLA entered into a game of whack-the-mole as shorts apparently tried to turn their dip on steroids into a sticky dip after the "on steroids" portion had failed. By 2:00pm, TSLA could be held back no longer, and it resumed a climb in parallel with the macro's climb. The morning mischief took it's toll, and TSLA's climb was about half of what you would expect from a hot tech stock. The good news: The shorting this morning was likely money-losing for the shorts involved, due to the afternoon climb. Additionally, Tesla closed above 348 today, which was a big loss for the shorts.

Unfortunately, NVIDIA had a poor showing in their ER after hours, and the stock lost 16% or so. This is the reason TSLA is dipping in after-hours trading today and a reason why the NASDAQ may be depressed tomorrow. The good news about the NVIDIA drop is that it may be similar to the AMD drop, which is a cooling of the cybermining phenomenon. This change does not suggest implications much beyond the fortunes of graphics cards manufacturers.

With the exception of a 10:00am dip, the NASDAQ rose for most of the day and closed up 1.72% for a strong performance

Shorts did 57.79% of TSLA FINRA-tagged selling today, a very high number considering the positive macro and TSLA performance. A cursory look at the morning icicle dips and the mid-day whack-a-mole games confirm that shorts were very active in manipulations today. As they lose money on days like today, they will again tire of the effort and realize the futility. At that point the percent of selling by shorts numbers fall below the 50% level.

Dusaniwsky's data reveals that net shorting has been neutral to slightly more shorting during recent days

Conditions:
* Dow up 209 (0.83%)
* NASDAQ up 123 (1.72%)
* TSLA 348.44, up 4.44 (1.29%)
* TSLA volume 4.5M shares
* Oil 56.56, up 0.31 (0.55%)

 

[Papafox]

Does anyone else find this interesting? I have often wondered if the brazen behavior by the shorts stems mainly from the valuation disparity between Tesla stock and Tesla bonds. I have also wondered if the shorts' high confidence in their own strategy would be undermined if Tesla bonds began to rally.

IB Traders’ Insight | Interactive Brokers - Examining the Differences Between Tesla's Equity and Bond Prices | Interactive Brokers

Jack, That's an interesting theory and probably carries weight. When the Q4 production and delivery numbers are announced, we should receive confirmation that Tesla is still very much on track as a long-term profitable company. That news should, in theory, prop up the bonds and help convince the shorts that it's time to pack up and leave. Looking forward to watching it all transpire!

As for Sosnick's presentation, he really did come across as being very short-oriented and wanting to create doubt in the minds of viewers. Bonds will, of course, change their value as interest rates change, and that has nothing to do with the underlying company's stability. Sosnick says investors ought to consider buying bonds instead of stock, since they're a safer investment. @neroden suggests you often can't buy the bonds unless you have big money, something like $100,000 to spend. It looks like Sosnick created this video before the Q3 ER and the very substantial positive cash flow was known. His argument revolves around Tesla being a continuously money-losing company and that assumption is now (at least as most of us perceive it) no longer true.

Let's hope we see a bounce back in the bond values by early January and get to check out Jack's theory.

 

[Stormy]

Ok guys, I need a bit of help. I need someone to talk me out of what must be a bad idea. I looked into the convertible bonds. (Cusip 88160RAB7) this morning. I can't remember the time, but lets assume Tesla was trading at 350. They quoted me a price of 100.67. So each note would cost $1006.70. Which would return either $1001.25 in March or 2.7788 shares. I must be doing my math wrong, because that still seems stupidly cheap. I can't understand why I wouldn't want to sell all my shares and buy these bonds. It basically removes the downside risk, and leaves you fully exposed to the upside potential. And that's why I need help. Cuz no deal is that good. I must be missing something.

 

[mongo]

Ok guys, I need a bit of help. I need someone to talk me out of what must be a bad idea. I looked into the convertible bonds. (Cusip 88160RAB7) this morning. I can't remember the time, but lets assume Tesla was trading at 350. They quoted me a price of 100.67. So each note would cost $1006.70. Which would return either $1001.25 in March or 2.7788 shares. I must be doing my math wrong, because that still seems stupidly cheap. I can't understand why I wouldn't want to sell all my shares and buy these bonds. It basically removes the downside risk, and leaves you fully exposed to the upside potential. And that's why I need help. Cuz no deal is that good. I must be missing something.

Getting 1001.25 back from spending 1006.70 doesn't seem like a good idea. 1006.70 will get you 2.8 ish shares currently.

 

[AudubonB]

I'm going to reiterate what I'd thrown out in the Market Action thread because I believe it worthy of this thread, and may assist in understanding this day's trading...and, if I'm correct, many other days yet to come.

As inconceivable as it might have seen even to the most starry-eyed of Tesla bulls as recently as, well, yesterday!, I'm thinking that today marked a new phase for the company's place in the investment world. With -

• Nvidia staggering to a 14-month low (Sept 7, 2017 or thenabouts) a mere 35 trading days and -44% after having reached an all-time high, bringing down the rest of the chip and much of the tech sector;
• Bloomberg leading its pages with headlines like "In Leaderless Stock Market, Gains are Proving Hard to Maintain" and "Get Me Out: Investors Sour on Market";
• I shouldn't have to detail what's happened to AAPL

- the fact that in the face of all that and more that TSLA has managed four back-to-back rises, ending the week $23.03 or 7% above its Monday close may be an indication that the investment world has begun to look at Tesla as a Flight to Quality aka Flight to Safety.

Everyone loves a winner. Everyone loves a profit-maker. Everyone loves a story that's zapping on all cells (sounds better than 'firing on all cylinders, donchathink?)

PS: Smeagol isn't 'Everyone'

 

[EVNow]

It basically removes the downside risk, and leaves you fully exposed to the upside potential. And that's why I need help. Cuz no deal is that good. I must be missing something.

Getting 1001.25 back from spending 1006.70 doesn't seem like a good idea. 1006.70 will get you 2.8 ish shares currently.

What happens if the SP is at $400 ? How much does one get back (1001.25 + $40 ?).