2017 Investor Roundtable: TSLA Market Action

[1kEE]

Wonder if it's gap-up tomorrow as it should, or if it's another crazy TSLA sell the news day?

Hard to tell, but I think we have bottomed. Doubt the M3-SN1 news is really major, if we gap up it would be a combo of SN1 and being technically oversold.

Here's my amateurish attempt at TA on the daily candles.....
TSLA Technical Analysis

 

[Intl Professor]

My portfolio is a lot larger than it was a few years ago (largely thanks to Tesla).

A bit over a year ago we bought 12 shares at just under $250. Our wealth manager had a fit, "your wife doesn't need more money when you crap out, that's too much risk with Tesla at 30% of your portfolio." It's now 56% or so, and not much affected by the recent dip. (I don't worry if TSLA drops. It usually recovers and we don't need the money now.)

He has orders not to sell TSA, BIDU, or BWLD. I wish I had told him not to sell NVDA at around $18 two years ago when he took over the account and purchased some real losers in pharmaceuticals, proving Andrea James' thesis East Coast analysts don't understand silicon valley. I'm somewhat mollified by techmaven's comment in a Google chat that we should not expect wealth managers to pay such close attention as we to individual stocks. I've never chided the guy because he did well by my brother, late sister, and Mom before she died, so he is bound to be as honest as a family friend. But when we need to sell some stock to buy, hopefully a Model S instead of one of the two M3s we're in line to reserve, I'm going to suggest BIIB which he suggested two years ago was "his" TSLA. Just to start the conversation, of course.

I'm not an alpha male like TT007 (who I love), just passive aggressive.

 

[JRP3]

Why are some expecting a gap up Monday?

TSLA is oversold, it popped in after hours Friday, plus Elon revealing his production Model 3. Basically I don't see any good reason why it won't head up tomorrow, which of course is no guarantee of anything.

 

[MitchJi]

This is my first big drop with LEAPs. I bought a J19 $250 near the peak. It's down 36%. I'm tempted to sell it and buy at a higher strike believing that the stock is now even more likely to go up. Obviously, if the stock goes down then I would be better off just holding this rather than striking up. If the stock goes up to $350 in the next few months, there isn't much difference in return with a higher strike price. Only a 4% increase by going to the higher strikes. If the stock gets closer to $400, then it's a different story and I would be much better off with a higher strike. With others doing LEAPs, do you tend to just hold through drops? Or do you go to a higher strike if you believe the stock is very likely to rally in the next few months? Thanks

IMO this question is more related to your analysis of the SP than to options. The one difference with leaps is that you should be much more confident about your projections than with shares.

I increased our leverage when the SP was high, because that gave me confidence in an higher SP by mid 2018. I still believe that was a good move, but doings that now would clearly have been much smarter with 20-20 hindsight.

 

[bdy0627]

Thanks. So, if expectation for the stock price remains unchanged despite a big dip then don't adjust your LEAPs. To my thinking, the lower the stock dips, the more I want to increase leverage since it is closer to a bottom than when it is up near an ATH. As it gets closer to an ATH, the more I want to back off leverage to avoid amplifying losses in a looming dip. Once it dips, then increase leverage. Rinse and repeat. This is definitely not a typical trader's approach but TSLA often doesn't move in typical fashion. There seem to be a lot of unexpected rises and drops.

 

[geneclean55]

On the daily chart. It is currently an 'inside-day' candle. If we can get above Thursdays range and above the lower bollinger band resistance into the low 320s, then a 20 dollar bounce could be in play. So some of the twitter guys that I follow are suggesting.

Also super strong AH volume on Friday. Shorts covering in anticipation of bounce, or longs positioning in anticipation of bounce.

 

[vgrinshpun]

I would characterise it more as that I don't think Tesla is telling the full truth but rather very specifically releasing information that supports a positive story while avoiding to tell a negative story. To me, that is ethically, morally and business-like acceptable behaviour for a company but that does not mean I don't try to understand the full story. Hence that I was I still invest in Tesla. At points where I think I can't trust management, I disinvest immediately. I have been quite open about when I did so with Tesla over the years.

Not that I subscribe to your definition of "lying", but if I would, the above highlight would definitely qualify as one.

Here is what you posted just a month ago: "Elon specifically said: "it usually doesn't work" That is an outright lie."

I am a fan of your critical contribution to this Forum, not so much of the grandstanding and exaggeration.

 

[MitchJi]

Thanks. So, if expectation for the stock price remains unchanged despite a big dip then don't adjust your LEAPs. To my thinking, the lower the stock dips, the more I want to increase leverage since it is closer to a bottom than when it is up near an ATH. As it gets closer to an ATH, the more I want to back off leverage to avoid amplifying losses in a looming dip. Once it dips, then increase leverage. Rinse and repeat. This is definitely not a typical trader's approach but TSLA often doesn't move in typical fashion. There seem to be a lot of unexpected rises and drops.

IMO, yes. The question is do you have sufficient confidence in the short term price fluctuations to make short term trades with a substantial percentage of your portfolio?

The one time I increased my leverage because the SP dropped without a good reason (when Tesla pushed forward the M3 ramp) I thought that it would probably recover by January-March of this year. It did that, but not before I got a little uneasy, and decided that probably isn't good enough.

But as a strategy doing that makes a lot more sense than what I did. It depends on what you think the SP will do.

Thanks! I'm going to keep this in mind for the next time I want to increase our leverage, consider waiting for a big dip. One problem I have with that strategy is that I believe that if Tesla is going to increase enough to rival Apple the big dips will get much less frequent.

My opinion only, not an advice.

 

[myusername]

TSLA is oversold, it popped in after hours Friday, plus Elon revealing his production Model 3. Basically I don't see any good reason why it won't head up tomorrow, which of course is no guarantee of anything.

depends on which chart you look at... and it was overbought for 6 straight months... so... clearly that doesn't matter.

 

[neroden]

modest proposal on Twitter

That guy who founded IB sounds like a consummate idiot when it comes to anything outside his narrow area of expertise (which appears to be computerized trading platforms). Really, he thought Trump would be good for business? Really?!?!?

 

[MitchJi]

That guy who founded IB sounds like a consummate idiot when it comes to anything outside his narrow area of expertise (which appears to be computerized trading platforms). Really, he thought Trump would be good for business? Really?!?!?

Clearly not the brightest bulb on the tree!

 

[Intl Professor]

Clearly not the brightest bulb on the tree!

You mean hedge, don't you? I know, correcting too many students' spelling is the cause I'm "extinguished," and on the hedge of life.

 

[madodel]

View attachment 234880
Clearly not the brightest bulb on the tree!

Ya think? Long MSFT and shorting TSLA. Hahahahahaha. He's expecting the Zune to take off any day now. Maybe MS will put 4 wheels on a Zune and compete with Tesla.

 

[Wenche]

Ya think? Long MSFT and shorting TSLA. Hahahahahaha. He's expecting the Zune to take off any day now. Maybe MS will put 4 wheels on a Zune and compete with Tesla.

My news feed on IB have been 95% negative as long as I remember. Now, I know why

 

[SPadival]

Ya think? Long MSFT and shorting TSLA. Hahahahahaha. He's expecting the Zune to take off any day now. Maybe MS will put 4 wheels on a Zune and compete with Tesla.

This never gets old.

Can you spot Thomas Peterffy in the audience?

 

[Zhelko Dimic]

This is my first big drop with LEAPs. I bought a J19 $250 near the peak. It's down 36%. I'm tempted to sell it and buy at a higher strike believing that the stock is now even more likely to go up. Obviously, if the stock goes down then I would be better off just holding this rather than striking up. If the stock goes up to $350 in the next few months, there isn't much difference in return with a higher strike price. Only a 4% increase by going to the higher strikes. If the stock gets closer to $400, then it's a different story and I would be much better off with a higher strike. With others doing LEAPs, do you tend to just hold through drops? Or do you go to a higher strike if you believe the stock is very likely to rally in the next few months? Thanks

I held through drops and traded around position(increased leverage when I though we bottomed, what you're just about to do), and this is how my most aggressive account looked like:

I dropped 98.47% at the lowest point, i.e. had 1.53% value left, just to recover to 28.18% end of April(even better now), i.e. I had 1741% return after I lost it almost all

Think about this... Increasing leverage at the wrong time will get you into some version of this graph. Please notice that drop, peak to through was $150,000 to $1131.68. It's not very comfortable thing.
BTW, I'm more than fine, this was just one of the accounts...

 

[Navin]

View attachment 234752 This guy who is a market maker and one of the 50 richest people in America is short tesla. There is no market manipulation (wink wink).

Holy cow. This is super interesting. I posted this earlier. Today - in doing some research online to try to find connections to WS and media - I noticed on mark Spiegel's website that his trading broker is IB

Service Providers

The chairman of IB Is also big tesla short. Very intriguing.

 

[geneclean55]

China PPI data looks respectable. Nasdaq Futures popping so far.

 

[ValueAnalyst]

"In the red" in business means losing money.

"In the black" means making money.

Model 3-Full Self Drive is the inflection point for Tesla from losing to making money.

I expect Tesla to be "in the black" for good starting in 2Q18, with or without FSD.

 

[ValueAnalyst]

I don't understand why anyone would want to invest in a company that they don't trust.

Trust, but verify.