2017 Investor Roundtable: TSLA Market Action

[racer26]

Simple: This plan works if you can market time tops and bottoms. But then again, ANY strategy works if you can market time tops and bottoms.

yep. easy to make money if you can accurately call the tops and bottoms.

My Dad has been on me this week about 'if he had got out at 380 like he talked about he could be 80$/share ahead' and my response was simply that he'd be pissed if instead of doing what it did, it went $75 the other direction in a week and he'd sold.

In general though, more leverage on dips like this and lightening the leverage load as you approach ATH seems to work - its essentially the strategy I've been executing. Yes, this dip could continue further, and that would hurt, but at some point you have to draw your line in the sand based on what you know about the company and what you think its intrinsic value is.

 

[bdy0627]

Simple: This plan works if you can market time tops and bottoms. But then again, ANY strategy works if you can market time tops and bottoms.

I thought it was a pretty good idea since we can't easily call the tops and bottoms to have some kind of systematic approach to leveraging lower and deleveraging higher. I tried leveraging with the trend as the stock kept rising. Worked well until it didn't, which was when the trend suddenly reversed seemingly on a dime with the ensuing flash drop. Lesson: don't chase the stock up too far. Ok, I get that. There were signs the uptrend was starting to run out, but then the Model 3 reveal was just around the corner. In hindsight, Once the stock ran into some trouble, I probably should have just gotten out of calls.

Now I'd like to figure out a reasonable way to add leverage when the stock is lower. The question is, how to successfully do it? For every strategy there is an achilles heel. Adding leverage after a substantial drop (15%+?) when a bottom forms and the stock starts to go back up seems like a reasonable approach unless it's a false move up and then drops 15%+ again.

 

[Papafox]

What is "capping"?

Here's an example of "capping" from yesterday's trading. The shorts wanted TSLA to stay comfortably below the lower bb (maybe the 100 dma too) yesterday, when the lower bollinger band was about 319. Thus, whenever TSLA approached 316 or so, a flurry of selling took place to keep the stock from rising above the lower bb and inducing buying by technically-oriented shorts and longs. Look how many times TSLA bounced off 316 yesterday. Yes, it is possible that there's some reason for resistence at 316 other than capping behavior, but I tind it fascinating that the vertical climbs were chopped off right around 316 yesterday, multiple times.

One of the reasons for the insanely high volumes right now is that shorts are selling when needed, slowly buying back to rearm when the trading is benign, and then selling like mad when needed to either induce a dip or cap a vertical rise. It's serious A Team manipulation by shorts because TSLA is ready to run higher and the shorts are not willing to give up the downtrend yet. Their hopes likely reside with macros. If there's a big macro down day, they can make progress downward, but lacking such an event, the longs seem to have the advantage at the moment.

 

[geneclean55]

I like the concept of capping, and some of it may well be occuring. The only conundrum for me is the crazy high volume that TSLA is experiencing, which has more of a institutional positioning flavor to me. I remember capping being discussed last summer after the merger announcement, when there were 2-3 million shares traded kind of days. Which seems more amenable to capping. Unless the shorts are so desperate/determined these days that they will do whatever it takes.

 

[Krugerrand]

Let's not let this thread (or the forum, but that's likely too huge a task) become the source of obfuscatory 'news' that, if not accomplished, leads to investor disappointment.

It is NOT now "100...oops, 98" days to when the TE battery bank must be up and running in South Australia. That clock does not start ticking until after a contract with the appropriate utility is signed, and that has not happened.

Yeah, let's not.

South Australian government signs agreement with Tesla and Neoen to build world’s largest lithium ion battery

Tesla World’s Biggest Battery Deal is 100-Day All-or-Nothing Gamble - Breitbart

So neither of those articles confirm NOR deny Tesla has signed the deal that starts the clock, but there is NO mention in those articles or in any other article that Tesla needs to sign a contract with the appropriate utility. It appears to me that the contract Tesla signs that starts the clock is between them and South Australia (and likely also includes Neone). If Tesla hasn't already signed that particular, it'll be real soon since this whole project - which depends on others besides just Tesla - needs to be up and running by some time in December for South Australia's summer. Tesla will have to have all their PowerPacks etc... installed and 'plugged in' ready to go BEFORE December as it's not like a single light switch gets thrown at the 12th hour and voila it all works.

Having watched the entire Jay Weatherill video posted here a few days ago, there's strong suggestion in it that the contract is signed or very close to being signed.

 

[dmckinstry]

Even though I'm always long and powderless now, this is a struggle worth watching today. TSLA is awesome, to use a phrase I never use. Mighty it is, indeed, even if the wind shifts in the next few minutes.

Although I'm practically powderless now, I put in a limit order Friday after closing for 3 shares at $315.00. It executed this morning at $312.87. I was afraid it wouldn't get executed and I wanted to get my total number of shares to be a multiple of 5. This was in Scottrade, and it's number of shares is now even, and has a cost basis of $89.85. Granted, that's irrelevant.

 

[Krugerrand]

Has this one been canceled?

"The China National Energy Administration has approved [May 2016] the world’s largest energy storage station to be built in Dalian, China. Rongke Power will supply its Vanadium Flow Batteries (VFB’s) for the 200-Megawatt, 800-Megawatt-hour (200MW/ 800MWh) station. The energy storage station will provide peak-shaving as well as form another load center for the Dalian peninsula, enhancing grid stabilization".

200MW/800MWh Energy Storage Station to be Built with RONGKE POWER’s Vanadium Flow Battery - UniEnergy Technologies

Who knows? But they've got until December 2017 to get it up and running to take the title from the South Australia deal, right?

 

[Curt Renz]

After-Hours July 10 CNBC: Here's why the man who called Tesla's fall is changing his tune

 

[Intl Professor]

This was in Scottrade, and it's number of shares is now even, and has a cost basis of $89.85. Granted, that's irrelevant.

Congratulations, like new babies, without all that messy reproductive stuff.

 

[bdy0627]

After hours it's up a bit. I'm wondering if that's generally free of shorts trying to push it down since they prefer to focus on pre-market to influence the trend for the day.

 

[Zhelko Dimic]

I thought it was a pretty good idea since we can't easily call the tops and bottoms to have some kind of systematic approach to leveraging lower and deleveraging higher. I tried leveraging with the trend as the stock kept rising. Worked well until it didn't, which was when the trend suddenly reversed seemingly on a dime with the ensuing flash drop. Lesson: don't chase the stock up too far. Ok, I get that. There were signs the uptrend was starting to run out, but then the Model 3 reveal was just around the corner. In hindsight, Once the stock ran into some trouble, I probably should have just gotten out of calls.

Now I'd like to figure out a reasonable way to add leverage when the stock is lower. The question is, how to successfully do it? For every strategy there is an achilles heel. Adding leverage after a substantial drop (15%+?) when a bottom forms and the stock starts to go back up seems like a reasonable approach unless it's a false move up and then drops 15%+ again.

If there was a reasonable easy strategy that always work, eventually everyone would be using it, which means it has to stop working. There have to be winners and losers in trading, it's a zero sum game. Which is the whole point of the game - there is no sure, consistent way to win in trading, as you're competing against other adaptable actors, i.e. humans. The only way to win is be one step ahead of the crowd in new algorithms, speed of execution etc...

Now investments is not zero sum game, i.e. much easier to win...

 

[Krugerrand]

I do not think the regular posters on SA are idiots.. I think they are paid FUD writers.

Ah, so unscrupulous. Much better than being idiots.

 

[Jonathan Hewitt]

If there was a reasonable easy strategy that always work, eventually everyone would be using it, which means it has to stop working. There have to be winners and losers in trading, it's a zero sum game. Which is the whole point of the game - there is no sure, consistent way to win in trading, as you're competing against other adaptable actors, i.e. humans. The only way to win is be one step ahead of the crowd in new algorithms, speed of execution etc...

Now investments is not zero sum game, i.e. much easier to win...

I fully agree with you, however Tastytrade.com has research that shows that options selling, when done following their trading guidelines, can be consistently profitable over a large data set. The key is it has to be a large dataset (hundreds of trades a year) over several different products, over a large period of time.

The reason why it's ok that one can be consistently profitable (and that it doesn't stop working) is because the seller of options has more risk than the buyer, so in order to take that risk the seller has to be compensated enough to be willing to take that risk. If a seller is not compensated enough to take the risk then the price goes up for the option until a seller decides it is worth the risk. Sometimes the buyer wins, sometimes the seller wins, but over time and many trades the seller will come out ahead if they trade according to tastytrade guidelines. The return one gets trading their way is nothing to brag about, but is higher than just straight investing in an index fund. Over a period of 10+ years the few extra percent does make a big difference.

 

[bdy0627]

jesselivenomore, Today at 10:52 AM
Doubt it will be a V bottom so watch for more turbulence, but starting to nibble back in today. I'm actually on a family vacation right now so sorry can't elaborate.

Bringing this over from a different thread

 

[D-egg-O]

Someone brought up the Apple/Tesla acquisition rumor again today. If I was to put money on Apple acquiring someone, it would be Lucid. IMO Lucid is the only other EV startup that seems to have their *sugar* together. They are in the prime stage for an acquisition. And we all know LeEco could use the money right now. It's a cheap way for Apple to acquire tech for a full EV.

 

[neroden]

Yeah, let's not.

South Australian government signs agreement with Tesla and Neoen to build world’s largest lithium ion battery

Tesla World’s Biggest Battery Deal is 100-Day All-or-Nothing Gamble - Breitbart

So neither of those articles confirm NOR deny Tesla has signed the deal that starts the clock, but there is NO mention in those articles or in any other article that Tesla needs to sign a contract with the appropriate utility. It appears to me that the contract Tesla signs that starts the clock is between them and South Australia (and likely also includes Neone). If Tesla hasn't already signed that particular, it'll be real soon since this whole project - which depends on others besides just Tesla - needs to be up and running by some time in December for South Australia's summer. Tesla will have to have all their PowerPacks etc... installed and 'plugged in' ready to go BEFORE December as it's not like a single light switch gets thrown at the 12th hour and voila it all works.

Having watched the entire Jay Weatherill video posted here a few days ago, there's strong suggestion in it that the contract is signed or very close to being signed.

There have been multiple credible reports that the timer starts when the utility signs the interconnect agreement. This absolutely needed to be in the contract, because the local utility is kind of a jackass and might well attempt to delay the grid connection out of maliciousness or spite.

The deadlline will probably end up being after December, because of this. I expect Tesla will have the system ready to go long before then.

 

[brian45011]

Who knows? But they've got until December 2017 to get it up and running to take the title from the South Australia deal, right?

"Fully commissioned": could be interpreted as the facility is being placed in operation in phases similar to the GF (and Hornsdale's turbines.)

 

[Zhelko Dimic]

I fully agree with you, however Tastytrade.com has research that shows that options selling, when done following their trading guidelines, can be consistently profitable over a large data set. The key is it has to be a large dataset (hundreds of trades a year) over several different products, over a large period of time.

The reason why it's ok that one can be consistently profitable (and that it doesn't stop working) is because the seller of options has more risk than the buyer, so in order to take that risk the seller has to be compensated enough to be willing to take that risk. If a seller is not compensated enough to take the risk then the price goes up for the option until a seller decides it is worth the risk. Sometimes the buyer wins, sometimes the seller wins, but over time and many trades the seller will come out ahead if they trade according to tastytrade guidelines. The return one gets trading their way is nothing to brag about, but is higher than just straight investing in an index fund. Over a period of 10+ years the few extra percent does make a big difference.

I can believe that.
If you're selling options, you're behaving like a MM, i.e. you're 'the house'.
You just have to have enough volume to make sure that 'house always wins', and to avoid that one lucky guy cleans you out

But that's also a complex strategy, I doubt individual can really implement it. Simple version of it is selling covered calls, because by definition you don't lose anything; except, it turns out you limit your gains, which is about as bad, if you wanted to hold.

I found that I was much better in choosing the right stock(company) than anticipating how quickly/slowly it will rise. Before Tesla, I made couple 100% gains combined on FB, NFLX, AMZN, and I was sold out of all of my stock because of the covered calls (even with rolling out and other mitigating strategies). Could have done much, much better if I didn't try to squeeze couple of extra percents. Hence the phrase "picking pennies in front of the steamroller" really resonates with me.

 

[bdy0627]

jesselivenomore, Today at 10:52 AM
Doubt it will be a V bottom so watch for more turbulence, but starting to nibble back in today. I'm actually on a family vacation right now so sorry can't elaborate.

Bringing this over from a different thread

Seeing this perspective from Jesselivenomore makes me hesitant about increasing leverage any further at this point. I was starting to feel like we were getting ready to take off again. If we would see another solid green day, I was feeling very confident that the stock was heading up prior to July 28. Maybe not so fast.

 

[RobStark]

Someone brought up the Apple/Tesla acquisition rumor again today. If I was to put money on Apple acquiring someone, it would be Lucid. IMO Lucid is the only other EV startup that seems to have their *sugar* together. They are in the prime stage for an acquisition. And we all know LeEco could use the money right now. It's a cheap way for Apple to acquire tech for a full EV.

LeEco Founder Jia Yueting Sells Stake In US EV Firm Lucid Motors

Amidst an ongoing liquidity crisis, the founder of Chinese tech conglomerate LeEco has sold his stake in Menlo Park, California-based electric vehicle company Lucid Motors.

Jia Yueting, who once dreamed of creating a Chinese tech juggernaut combining the attributes of Netflix, Apple and Tesla, revealed the news of his divestment last week during an especially candid annual shareholder meeting of LeEco's listed entity, Leshi Internet Information & Technology Corp.


Lucid Motors was founded in 2007 by an entrepreneur named Sam Weng, who is fluent in Japanese, Chinese and English, with two other partners focusing on developing battery systems for EVs.

With backings from LeEco, Tsing Capital, China Environmental Fund, Jafco Life Science, Japan's Mitsui & Co., Ltd., and U.S. venture firm Venrock, Lucid aims to produce luxury EVs to compete with BMW and Mercedes-Benz.