2017 Investor Roundtable: TSLA Market Action

[AlMc]

Yes. looks like it may get done in the house. THANKS to Lump for the link. (I am improving on my copy and paste skills! )

Chances of passing Obamacare replacement improve after talk of changes, as House awaits CBO score

 

[jeewee3000]

TSLA back up to $257 pre-market. Following macro I guess.

EDIT: I expect a bump during amateur hour, then selloff back down to around 255

 

[TrendTrader007]

$TSLA probability of a $500 stock by October 2017 steadily increasing
$SNAP about to become a runaway stock

 

[Xorbit]

So, did the sharp sell-off 2 days ago wrong-foot traders and raise confidence prematurely among the shorts? We will need to close above the high of that day ($264.80) to say with more confidence that it was a bear trap. Here's the daily chart. The main positive for me is that Williams%R reversed higher without crossing into the lower frame (-60 to -100). The 10-DMA has also crossed higher through the 20-DMA Bollinger Band centre line. I'd like to see the green 5-DMA turn upwards and to see longer green candles on MACD.

Charts don't like 'white space', so I'm also hoping price will move up to touch the upper Bollinger Band and fill the space above it. Coincidentally the Upper Bollinger Band is at $264.84 or about the same as the high of 2 days ago. Is the current set-up similar to the beginning of December (arrow on chart), right before the rally?

 

[AlMc]

$TSLA probability of a $500 stock by October 2017 steadily increasing
$SNAP about to become a runaway stock

I enjoy reading your enthusiastic posts. Being a little more realistic/conservative TSLA bull, I will be happy to see and hold $300-325 in your October 2017 time frame.

 

[Starno]

I enjoy reading your enthusiastic posts. Being a little more realistic/conservative TSLA bull, I will be happy to see and hold $300-325 in your October 2017 time frame.

Yes, 300-325 will happen by October only if Model 3 production and delivery schedule is on point.

500 might happen if the ramp up production happen like forecasted, so that 2018 Q1 reports show an incredible revenue growth with profits coming down the road. So around May 2018, we might see a 500 dollars TSLA stock.

 

[Xorbit]

One other thought: the yearly move between 2013 and 2015 - massive advance, followed by sideways period of digestion and consolidation, and the daily move since the $180 Dec 16 low show a similar pattern that IMO is very bullish. Consolidating the rise, whilst only giving back part of it is very positive. I don't use Fibonacci retracement levels very much, but it's still interesting to compare the 2 moves, as within a point or two, there's a 38.2% retracement in both cases. I've used closing prices and $37.89 (for me that was the closing low just before the huge bull run in 2013) for the post-IPO low:

2013-2015 bull run low: $37.89 - July 15 high: $264.01 - 38.2% retracement: $178 - actual low: $189
Dec 16-present bull run low: $181.45 - Feb 17 high: $280.75 - 38.2% retracement: $242 - actual low: $245

So, in both cases have we seen and are we just seeing healthy Fib retracements of respective bull moves that precede further advance?

 

[techmaven]

What are the chances that the market will shrug off the risk of the vote today, or if the vote doesn't go through?

I don't want this vote to go through and a market correction might be a good thing actually for the market. But it is still strange for the two to be tied together so tightly.

The market seems to be shrugging this off, although oil is on a downward trajectory and gold is up, vix is up, and 10 year is down. So why are the indexes up?

 

[TrendTrader007]

One other thought: the yearly move between 2013 and 2015 - massive advance, followed by sideways period of digestion and consolidation, and the daily move since the $180 Dec 16 low show a similar pattern that IMO is very bullish. Consolidating the rise, whilst only giving back part of it is very positive. I don't use Fibonacci retracement levels very much, but it's still interesting to compare the 2 moves, as within a point or two, there's a 38.2% retracement in both cases. I've used closing prices and $37.89 (for me that was the closing low just before the huge bull run in 2013) for the post-IPO low:

2013-2015 bull run low: $37.89 - July 15 high: $264.01 - 38.2% retracement: $178 - actual low: $189
Dec 16-present bull run low: $181.45 - Feb 17 high: $280.75 - 38.2% retracement: $242 - actual low: $245

So, in both cases have we seen and are we just seeing healthy Fib retracements of respective bull moves that precede further advance?

There are too many price similarities between 2013 March timeframe and current period to ignore
I would be really surprised if TSLA did not mount a furious rally in upcoming weeks
My best guess that we steadily rise from here and then starting first week of April with delivery #s and M3 release candidates and TE news we could ignite a fast and furious rally which may take TSLA well beyond $300 range
I'm just guessing of course but this is how I've placed all my bets It does not matter to me whether TSLA goes to 300 or 400 or 500 I stand to make money with every single dollar of stock advance since Im loaded with all kinds of call option of every conceivable strike price and tons of stock

 

[Irishjugg]

There are too many price similarities between 2013 March timeframe and current period to ignore

It's important to note that, mathematically speaking and based on large scale historical market analysis, the above point is completely meaningless in terms of predicting future price movements. To newer traders here, please don't accept what he's saying as some factual statement. He's a really enthusiastic TSLA cheerleader that's a true believer of chart analysis, but chart analysis doesn't dictate stock price movement and as a general rule is incorrect considerably more often than it's correct.

Careful out there.

 

[vgrinshpun]

Yesterday there was active shorting activity day at Fidelity, series of snap shots throughout the day caught 306k shares borrowed for shorting and 306k shares covered, for a net covering of 24 (!) shares. All that activity, and no meaningless result to show . So we do see rotation of the short positions reminiscent of what was commonly concluded happening in 2013. What is clear is that short sellers are split in their conclusions: some feel an opportune moment to close position, while others opening new short positions.

Today's early morning action was more subdued than yesterday's - snap shots caught about 50k shares borrowed vs. 144k yesterday.

 

[MitchJi]

My best guess that we steadily rise from here and then starting first week of April with delivery #s and M3 release candidates and TE news we could ignite a fast and furious rally which may take TSLA well beyond $300 range

We should get some news and a bump at the have the M3 reveal part 3 (March-April?), as opposed to the final reveal in July.

 

[racer26]

We should get some news and a bump at the have the M3 reveal part 3 (March-April?), as opposed to the final reveal in July.

So far we don't know for sure if there are one or two remaining Model 3 reveals.

Not really clear.

 

[Xorbit]

3-hour chart. Lots of white space above the 20-period moving average ($256.58). If we can break through, chances are that we can undo Tuesday's drop.

 

[austinEV]

There are too many price similarities between 2013 March timeframe and current period to ignore
I would be really surprised if TSLA did not mount a furious rally in upcoming weeks
My best guess that we steadily rise from here and then starting first week of April with delivery #s and M3 release candidates and TE news we could ignite a fast and furious rally which may take TSLA well beyond $300 range
I'm just guessing of course but this is how I've placed all my bets It does not matter to me whether TSLA goes to 300 or 400 or 500 I stand to make money with every single dollar of stock advance since Im loaded with all kinds of call option of every conceivable strike price and tons of stock

Ok, I am a Tesla bull and believe we will see >$300 sometime, due to the M3. However, please give me the fleshed-out thesis for why it happens soon, or in the next few months. Here are the future scenarios I see playing out.

For all of these, my base assumption is that the M3 comes out in modest volumes in Q3 and better volumes in Q4. Call it a few k cars in Q3, and maybe 20-30k in Q4. With no major problems. In other words, a virtual home run in terms of market expectations. I further assume that the stock will revalue 3-6 months before the appropriate trigger actually occurs.

Stock price scenarios:

1) The mere reality of the M3 causes the jump. A reveal in July is essentially required, just before or concurrent with employees getting cars. So the final interior, specs, ordering page, and actual deliveries more than the Model X' embarrrassing 6 causes market euphoria. It is not important that the sales are not terribly accretive financially. The market loves it and the new valuation happens very soon, April, May or June of 2017.

2) The market isn't too excited about a few M3s, and wants the margin story. Most of the excitement of the M3 being a real thing is already priced in, and the market wants to see margins. The main bear argument at this point is that the M3 is a money loser, and Elon didn't help this by telling that ER story about how margins will be terrible at first. So basically the market does wait-and-see and there is a Q4 ER where they say the margins are say 25% and improving sharply. News arrives Feb of 2018, and maybe the market generally anticipates it and the new valuation happens end of 2017.

3) The Market isn't excited about a few M3s, or statements about margins or other stated successes. They want to see money. In this most bearish bull scenario the market isn't impressed by anything other than financial top and bottom line results. The volume of Q4 of 2017 or even Q1 of 2018 turns the profit story on its head (Tesla loses money, burning cash, M3 loses money on every car etc). In some ER there will be a step change in revenue and profit. That is the signal that the risk is essentially gone. The market anticipates this and is revalued in the first half of 2018, but maybe as late as March/April of next year.

Bonus wildcard scenario) Trump is called to testify in the Russia probe. Steps down complaining loudly that he is a victim promising to tear down the country behind him. Pence is president. A period of uncertainty follows, then stabilization as everyone realizes we are better off now with a sane politician with toxic policies over an unstable politician with toxic policies. This happens any time in the next 4 years. This could happen concurrently with the growth story above, causing havoc with otherwise smart option plays.


Trend trader for sure, and maybe others on this board seem to be putting a lot of faith in the first scenario. Aren't the others just as likely?

 

[Mike Smith]

It should be noted that last year when Tesla raised at $215 the share price didn't fall below that until they announced the Solar City deal. The drop on Tuesday was an absolute gift to anyone looking to add shares.

 

[larmor]

Ok, I am a Tesla bull and believe we will see >$300 sometime, due to the M3. However, please give me the fleshed-out thesis for why it happens soon, or in the next few months. Here are the future scenarios I see playing out.

For all of these, my base assumption is that the M3 comes out in modest volumes in Q3 and better volumes in Q4. Call it a few k cars in Q3, and maybe 20-30k in Q4. With no major problems. In other words, a virtual home run in terms of market expectations. I further assume that the stock will revalue 3-6 months before the appropriate trigger actually occurs.

Stock price scenarios:

1) The mere reality of the M3 causes the jump. A reveal in July is essentially required, just before or concurrent with employees getting cars. So the final interior, specs, ordering page, and actual deliveries more than the Model X' embarrrassing 6 causes market euphoria. It is not important that the sales are not terribly accretive financially. The market loves it and the new valuation happens very soon, April, May or June of 2017.

2) The market isn't too excited about a few M3s, and wants the margin story. Most of the excitement of the M3 being a real thing is already priced in, and the market wants to see margins. The main bear argument at this point is that the M3 is a money loser, and Elon didn't help this by telling that ER story about how margins will be terrible at first. So basically the market does wait-and-see and there is a Q4 ER where they say the margins are say 25% and improving sharply. News arrives Feb of 2018, and maybe the market generally anticipates it and the new valuation happens end of 2017.

3) The Market isn't excited about a few M3s, or statements about margins or other stated successes. They want to see money. In this most bearish bull scenario the market isn't impressed by anything other than financial top and bottom line results. The volume of Q4 of 2017 or even Q1 of 2018 turns the profit story on its head (Tesla loses money, burning cash, M3 loses money on every car etc). In some ER there will be a step change in revenue and profit. That is the signal that the risk is essentially gone. The market anticipates this and is revalued in the first half of 2018, but maybe as late as March/April of next year.

Bonus wildcard scenario) Trump is called to testify in the Russia probe. Steps down complaining loudly that he is a victim promising to tear down the country behind him. Pence is president. A period of uncertainty follows, then stabilization as everyone realizes we are better off now with a sane politician with toxic policies over an unstable politician with toxic policies. This happens any time in the next 4 years. This could happen concurrently with the growth story above, causing havoc with otherwise smart option plays.


Trend trader for sure, and maybe others on this board seem to be putting a lot of faith in the first scenario. Aren't the others just as likely?

Wildcard remains TE, if there are projects which are heading completion and realization of revenue that would be enough to get to 300-easy since Tesla is early to market. M3 demonstration reveal of production vehicle-market loses its mind, macro headwinds won't matter...

 

[Fallenone]

Ok, I am a Tesla bull and believe we will see >$300 sometime, due to the M3. However, please give me the fleshed-out thesis for why it happens soon, or in the next few months. Here are the future scenarios I see playing out.

For all of these, my base assumption is that the M3 comes out in modest volumes in Q3 and better volumes in Q4. Call it a few k cars in Q3, and maybe 20-30k in Q4. With no major problems. In other words, a virtual home run in terms of market expectations. I further assume that the stock will revalue 3-6 months before the appropriate trigger actually occurs.

Stock price scenarios:

1) The mere reality of the M3 causes the jump. A reveal in July is essentially required, just before or concurrent with employees getting cars. So the final interior, specs, ordering page, and actual deliveries more than the Model X' embarrrassing 6 causes market euphoria. It is not important that the sales are not terribly accretive financially. The market loves it and the new valuation happens very soon, April, May or June of 2017.

2) The market isn't too excited about a few M3s, and wants the margin story. Most of the excitement of the M3 being a real thing is already priced in, and the market wants to see margins. The main bear argument at this point is that the M3 is a money loser, and Elon didn't help this by telling that ER story about how margins will be terrible at first. So basically the market does wait-and-see and there is a Q4 ER where they say the margins are say 25% and improving sharply. News arrives Feb of 2018, and maybe the market generally anticipates it and the new valuation happens end of 2017.

3) The Market isn't excited about a few M3s, or statements about margins or other stated successes. They want to see money. In this most bearish bull scenario the market isn't impressed by anything other than financial top and bottom line results. The volume of Q4 of 2017 or even Q1 of 2018 turns the profit story on its head (Tesla loses money, burning cash, M3 loses money on every car etc). In some ER there will be a step change in revenue and profit. That is the signal that the risk is essentially gone. The market anticipates this and is revalued in the first half of 2018, but maybe as late as March/April of next year.

Bonus wildcard scenario) Trump is called to testify in the Russia probe. Steps down complaining loudly that he is a victim promising to tear down the country behind him. Pence is president. A period of uncertainty follows, then stabilization as everyone realizes we are better off now with a sane politician with toxic policies over an unstable politician with toxic policies. This happens any time in the next 4 years. This could happen concurrently with the growth story above, causing havoc with otherwise smart option plays.


Trend trader for sure, and maybe others on this board seem to be putting a lot of faith in the first scenario. Aren't the others just as likely?

I'm in camp 2. I think camp 1 is priced in at this level of stock price for a very long time already.

 

[Xorbit]

Trend trader for sure, and maybe others on this board seem to be putting a lot of faith in the first scenario. Aren't the others just as likely?

It's obviously all guesswork, but the question I ask myself is what scenario has the market attached the most probability to? EM now has a reputation for over-promising and delivering behind schedule. When you combine this with the relatively low estimates the investment banks have for M3 production in H2 17, my best guess is that the market isn't expecting much and that mass production will only be a H1 18 story. I think a lot of people were surprised that Tesla is going straight from an Alpha prototype to a release candidate. Once again, this seems typical of the risk-taking, devil-may-care Elon Musk. I'm a real neophyte here, but this also seems to be atypical and fraught with danger. All that to say, because of past (negative Model X) experiences I feel the market is not pricing in what Tesla have guided: steady scaling in H2 17 with no delays (albeit with the caveat that they're dependent on the least reliable supplier).

I also have no clue what goes on in Elon's head, but given the importance of getting the Model 3 right, I think he would have to be crazy to skip beta testing unless he had high confidence that problems will be minimal and, if there is to be a delay, not have said so by now. Feels to me like the upside/downside is asymmetrically biased to the upside. Then again, my own default bias is bullish optimism.

 

[dw4ngg]

There are too many price similarities between 2013 March timeframe and current period to ignore
I would be really surprised if TSLA did not mount a furious rally in upcoming weeks
My best guess that we steadily rise from here and then starting first week of April with delivery #s and M3 release candidates and TE news we could ignite a fast and furious rally which may take TSLA well beyond $300 range
I'm just guessing of course but this is how I've placed all my bets It does not matter to me whether TSLA goes to 300 or 400 or 500 I stand to make money with every single dollar of stock advance since Im loaded with all kinds of call option of every conceivable strike price and tons of stock

You should be in sales for you unwavering sense of optimism