2017 Investor Roundtable: TSLA Market Action

[Papafox]

The battle for the $230s begins. Should be pretty epic. Might take some more firepower (good news) to break through the $230 / $235 barriers.

I'm guessing that the typical Monday morning first hour buying spree will take TSLA over $230 with ease, if macros and the news cycle allow, but the big question is whether that price will hold through close on Monday. I suppose that depends upon how much higher than $230 TSLA goes Monday morning.

 

[Chris Fox]

Is $230 historical resistance for Tesla or just an even number which is usually difficult to crack?

 

[esk8mw]

Is $230 historical resistance for Tesla or just an even number which is usually difficult to crack?

Historical resistance, but $235 is a stronger level to break. Look for $250 if we break 235, IMO.

 

[Papafox]

Note: I suspect shorts were up quite well in 2nd half of 2016 up until November or so, when the rally began and they started losing money big time, for a net loss during the 2nd half of 2016. The profit/loss numbers for this week (2017) speak volumes.

 

[drinkerofkoolaid]

Big tech companies and big banks report earnings next two weeks, which is also the same time 'Trump', "inauguration ceremony" is scheduled.

I find it strange that big banks and oil companies rallied 30-50% from November - January 1st due to the belief that the Republucans will eliminate all regulations and do everything possible to strengthen big banks and big oil, and kill the planet.

When did the EOD (end of days) investment strategy become an accepted or advisable investment strategy?

Maybe 2017 is the year big investment firms realize it's in their best interest and the best interest of the human race to divest from fossil fuel companies and invest in clean energy companies and companies that take Corporate Social Responsibility seriously?

I can't think of any reason any person or company with hundreds of millions, billions, or trillions of dollars would consider it to be in their best interest to keep their money in the bank. 2017 and beyond looks to be an ideal time to invest large amounts of cash in ways that will yield huge profits, benefit humanity, and act as a huge stimulus for every country.

 

[Tslynk67]

The battle for the $230s begins. Should be pretty epic. Might take some more firepower (good news) to break through the $230 / $235 barriers.

TSLA seems to do best on bad/no news. I can't figure out why, but often seems to be the case...

 

[Chris Fox]

Big tech companies and big banks report earnings next two weeks, which is also the same time 'Trump', "inauguration ceremony" is scheduled.

I find it strange that big banks and oil companies rallied 30-50% from November - January 1st due to the belief that the Republucans will eliminate all regulations and do everything possible to strengthen big banks and big oil, and kill the planet.

When did the EOD (end of days) investment strategy become an accepted or advisable investment strategy?

Maybe 2017 is the year big investment firms realize it's in their best interest and the best interest of the human race to divest from fossil fuel companies and invest in clean energy companies and companies that take Corporate Social Responsibility seriously?

I can't think of any reason any person or company with hundreds of millions, billions, or trillions of dollars would consider it to be in their best interest to keep their money in the bank. 2017 and beyond looks to be an ideal time to invest large amounts of cash in ways that will yield huge profits, benefit humanity, and act as a huge stimulus for every country.

Have no fear.. the better tech will win the day and Tesla is the iPod in a sea of Sony Walkman manufacturers.

Why get your energy from coal when you can have a roof that costs less than a regular roof, lasts twice as long as a regular roof, looks far better and produces its own electricity? When a natural disaster strikes and all your neighbors lose power and come to your house to charge their iPhones, they'll see the benefits too.

And Tesla Energy.. every business, every utility and every home could use energy storage and competitor comes close to Tesla's price per K/W

 

[dakh]

One of the reasons I am watching this is that I would like to know when massive covering take place, as that would be a signal to get out of the short term / medium term trading positions.

Can you elaborate on your expected dynamic with short position unwinding?

If all goes to plan, Tesla transitions from a startup to an established player in the eyes of the market. Short interest will have to come down a lot. Personally I was under impression that unless a truly violent squeeze takes place (which, in my opinion, isn't that likely), it will be a somewhat orderly unwinding. Say we get an excellent Q1 and TSLA jumps to $280. Say this then triggers substantial short covering and we get $300. Would you then call it good on your short term positions? What would be the numbers you'd be looking for to make that decision? TIA!

 

[larmor]

View attachment 209395

Note: I suspect shorts were up quite well in 2nd half of 2016 up until November or so, when the rally began and they started losing money big time, for a net loss during the 2nd half of 2016. The profit/loss numbers for this week (2017) speak volumes.

Is that 2017 number just for one week?

 

[Papafox]

Is that 2017 number just for one week?

Looks that way to me. Moreover, It is only for Jan 3 and Jan 4 because 1-2 were holidays. Pretty amazing.

Let's see... If shorts had $8.1 billion in TSLA holdings and the stock was worth about $225, that would mean they controlled about 36 million shares, which is about right. $475mn/36mn= $13.19/share loss, which is reasonable. If there's this much pain from two day's of trading, can you imagine what is coming later this year?

 

[techmaven]

Remember, though, just like longs that held through dips, many of these bears are deeply committed and hold through peaks. Only Tesla with solid results will really change their minds.

 

[EinSV]

Remember, though, just like longs that held through dips, many of these bears are deeply committed and hold through peaks. Only Tesla with solid results will really change their minds.

That is true, but I do wonder if major TE news in the next few months could be enough of a disrupting influence to cause a significant number of shorts to scurry for the exits. The shorts in 2012/2013 were equally committed and they got crushed once enough bulls jumped in and drove the SP up.

 

[ZsoZso]

That is true, but I do wonder if major TE news in the next few months could be enough of a disrupting influence to cause a significant number of shorts to scurry for the exits. The shorts in 2012/2013 were equally committed and they got crushed once enough bulls jumped in and drove the SP up.

I doubt that we will see a massive exodus of shorts until all of these conditions are met:
1. TSLA north of $300.
2. series of cash flow positive quarters
3. Model-3 production ramping up without issues
4. TE and solar producing significant income

 

[3Victoria]

But do they not have cover their losses in their margin accounts? Or do some of them get to play fast and loose?

 

[EinSV]

I doubt that we will see a massive exodus of shorts until all of these conditions are met:
1. TSLA north of $300.
2. series of cash flow positive quarters
3. Model-3 production ramping up without issues
4. TE and solar producing significant income

Possibly, although I think your number 3 alone would very likely lead to your number 1, which would probably do the trick.

 

[techmaven]

I doubt that we will see a massive exodus of shorts until all of these conditions are met:
1. TSLA north of $300.
2. series of cash flow positive quarters
3. Model-3 production ramping up without issues
4. TE and solar producing significant income

I don't think it needs that much. A quick $300 for an unsustainable reason won't shake them loose. But two cash flow positive quarters would. As would Model 3 production looking like real volume. TE could help set that stage.

 

[vgrinshpun]

But do they not have cover their losses in their margin accounts? Or do some of them get to play fast and loose?

Actually, as SP goes up they need to come up with cash to put in as collateral at slightly HIGHER than 100% into a separate account, typically adjusted daily. Combine this with higher interest on higher SP, and this could escalate into uncontrollable situation pretty quick, at least for non ideological short sellers without unlimited funding.

The whole thing is very hard to predict, but at ATH level ALL short sellers will be under water.

 

[neroden]

For reference, short-sellers can of course use other stocks as collateral, so really big long-short funds can hold on a long time. A fund could have a $100 million short postion in TSLA but if it has $10 billion long in other stocks, they can weather very large rises in TSLA without suffering margin calls (they'd still lose money, but they have enough collateral that the brokerage will keep extending loans).

The ones who will get destroyed quickly by a big stock rise are the ones with concentrated short positions in TSLA -- nothing else to use to cover the losses.

 

[vgrinshpun]

There are only 503 shares available for shorting as of 8:12am this morning. Not sure if Fidelity just late adding shares, or there is another reason...

Can anybody with accounts at other Brokerages take a look what's available for shorting there?

 

[NOLA_Mike]

There are only 503 shares available for shorting as of 8:12am this morning. Not sure if Fidelity just late adding shares, or there is another reason...

Can anybody with accounts at other Brokerages take a look what's available for shorting there?

Zero shares available for shorting showing at IB as of now