2017 Investor Roundtable: TSLA Market Action

[vgrinshpun]

There is interesting take on TSLA technicals from the IBD, which, as I understand, has wide subscription base and is being followed by a lot of traders. Back on Jan 26 they published article with the following recommendation on trading Tesla:

Watch to see if the stock holds above the critical 250 level, where for months Tesla had had trouble penetrating. Given the long basing action, the stock is now within real striking distance of surpassing a potential 269.44 buy point.

Today they published another article, indicating another technical construct:

Tesla shares have formed a cup-with-handle base going back nearly 10 months. The buy point, 10 cents above the top of the handle, is 258.57.

It looks like there could be transition from one buy point right into the second one. The question, of course, is if this pans out, what about timing? I think that we might trigger 258.57 in a day or two, with a quick jump up to just below the second buy point of $269.44. I think that SP than will "sit" at this level until the ER, which might trigger run up from this second buy point in case there is no negative surprises on Q4 financials and good specific guidance going forward. If there are any positive surprises regarding the Q4 financials, the run up from second buy point of $269.44 could be explosive.

Just my $0.02...

 

[JRP3]

$TSLA hard to overstate the symmetric beauty of totally sexy quarterly chart
Cup shaped pattern
Stock goes much higher

$TSLA hard to believe that this stock will not run up to at least $800 to $1000 if not much higher over the next 8 quarters (2 years)

$TSLA now of course if we get a super nice short squeeze (imminent) and a fantastic run comparable to 2013-2014 then I'm looking at a SP of $1800 to $2000

$TSLA $1000 SP gets market cap of $159 billion eminently doable
$2000 might be a stretch but not if VW like short squeeze

Someone forget their meds today? Overly exuberant posts such as these make me start to think about a top and impending pullback.

 

[neroden]

Well, I was expecting a pullback before earnings, but geez, that just shows how bad I am at predicting short term price movements.

 

[vgrinshpun]

There were discussions about whether TSLA is back into the channel or not. there are different ways to draw channels. For well organized patterns I prefer regression channel which is a statistically derived indicator.

TSLA is about to get back into the regression channel with starting/end points on 12/02/2016 and 1/25/2017 (last day before consolidation/cup handle). We'll see what tomorrow brings, but things look good IMO.

 

[techmaven]

Well, I was expecting a pullback before earnings, but geez, that just shows how bad I am at predicting short term price movements.

Still plenty of time for that.

 

[Papafox]

There is interesting take on TSLA technicals from the IBD, which, as I understand, has wide subscription base and is being followed by a lot of traders. Back on Jan 26 they published article with the following recommendation on trading Tesla:

Watch to see if the stock holds above the critical 250 level, where for months Tesla had had trouble penetrating. Given the long basing action, the stock is now within real striking distance of surpassing a potential 269.44 buy point.

Today they published another article, indicating another technical construct:

Tesla shares have formed a cup-with-handle base going back nearly 10 months. The buy point, 10 cents above the top of the handle, is 258.57.

It looks like there could be transition from one buy point right into the second one. The question, of course, is if this pans out, what about timing? I think that we might trigger 258.57 in a day or two, with a quick jump up to just below the second buy point of $269.44. I think that SP than will "sit" at this level until the ER, which might trigger run up from this second buy point in case there is no negative surprises on Q4 financials and good specific guidance going forward. If there are any positive surprises regarding the Q4 financials, the run up from second buy point of $269.44 could be explosive.

Just my $0.02...

Which means that we're going to see a battle over 258.57 in the morning with the shorts. Fortunately, shorts have seen a lot of lost battles lately.

 

[geneclean55]

Well then here's hoping for a gap up and go!

 

[vgrinshpun]

Here is the update on today's shorting activity at Fidelity. There was initial loading on borrowed shares in pre-market to the tune of 103k, but during the first hour of trading, TSLA showing strength against overall market headwinds, seem to be enough for some short sellers to start bailing out. As I mentioned many time before, the tables of the activity at Fidelity are the snap shots at random time intervals. Although they do not represent exact numerical data on short selling activity, it is IMO is representative enough to ascertain general trend. So with the disclaimer above, there was approximately 118k of shares borrowed for shorting, with overwhelming majority of them (103k) in pre-market trading. There were total of approximately 425k shares covered, for a net covering of 307k shares.

I think that we will continue to see spurs of covering before ER, but it seems that a real stampede could happen only if there is strong ER. Any positive surprise in Q4 financials , or even just strong guidance could trigger significant short covering. Absent of at least one of these, TSLA might move sideways until the next positive catalyst.

Just my $0.02.

 

[GoTslaGo]

Interesting article in Investopedia about a "short squeeze method". Specifically they indicate as part of their metrics to use this method:

"Short Interest Ratio

The short interest ratio is the short interest divided by average daily trading volume of the stock in question. For instance, if you take 200,000 shares of short stock and divide it by an average daily trading volume of 40,000 shares, it would take five days for the short sellers to buy back their shares.

The higher the ratio, the higher the likelihood short sellers will help drive the price up. A short interest ratio of five or better is a good indicator that short sellers might panic, and it's a good time to buy a short squeeze."

The last paragraph I assume is what NASDAQ refers to as "days to cover". So they maintain anything above 5 days to cover creates a possible "short squeeze method" opportunity. IIRC current Short shares are around 40 million. Volume 3.5 million. We're seeing a days to cover over 10 days!

The Short Squeeze Method

So it seems whomever is closing out their short position is wise...

 

[ev-enthusiast]

Bodes well for TE:
Millions of Tesla battery cells are powering thousands of LA homes
Enough installations done for powering 15 000 homes in LA.
Could help for a good open this morning.
Let the games begin.

 

[GoTslaGo]

There were discussions about whether TSLA is back into the channel or not. there are different ways to draw channels. For well organized patterns I prefer regression channel which is a statistically derived indicator.

TSLA is about to get back into the regression channel with starting/end points on 12/02/2016 and 1/25/2017 (last day before consolidation/cup handle). We'll see what tomorrow brings, but things look good IMO.

View attachment 213630

I'm wondering if last weeks price "inaction" could reflect a spring-type "false breakout to the downside" pattern:

http://www.investinganswers.com/financial-dictionary/technical-analysis/springs-and-upthrusts-902

It does seem to qualify as the spring as noted below:

"For a spring, a small penetration on small volume is bullish, as it indicates there are few traders who are willing to sell their shares below support. For an upthrust, a large penetration on large volume is bearish, because it shows that the bulls could not sustain higher prices despite the activity."

As we all have seen, last week's push to the downside was tepid, with low volumes. This seems to meet the criteria noted above.

 

[Hogfighter]

$TSLA hard to overstate the symmetric beauty of totally sexy quarterly chart
Cup shaped pattern
Stock goes much higher

That's the biggest cup and smallest handle I've seen in a while. Bullish sign.

 

[Hogfighter]

Such interesting times. Many articles out finally realizing that TSLA is more than just another car company.....hugely positive for comparative analysis. Musk engaging with Trump doesn't sit well with hard core types, but Wall Street's tide is turning and is warming up to the idea that TSLA is for real.

I've thought this many times, but this quarterly report and CC is quite important.....if the dad gum analysts ask the right questions.

 

[MitchJi]

Interesting information (not critical of trump):
Trump's economic agenda is stalling

President Trump has certainly made a lot of news during his first couple weeks in office. But his top economic priorities are bogging down amid the usual infighting in Washington.

 

[MitchJi]

Such interesting times. Many articles out finally realizing that TSLA is more than just another car company.....hugely positive for comparative analysis. Musk engaging with Trump doesn't sit well with hard core types, but Wall Street's tide is turning and is warming up to the idea that TSLA is for real.

I've thought this many times, but this quarterly report and CC is quite important..... if the dad gum analysts ask the right questions.,

I would not count on the analysis asking intelligent questions.

 

[Irishjugg]

Well, I was expecting a pullback before earnings, but geez, that just shows how bad I am at predicting short term price movements.

Same here lol

 

[aubreymcfato]

Which means that we're going to see a battle over 258.57 in the morning with the shorts. Fortunately, shorts have seen a lot of lost battles lately.

We already touched that in pre-market.

 

[Peoria]

Sold all shares at close yesterday (I don't have a lot). Doubting this will pop much higher before ER. Doubting more that all time high will be broken before ER. Hopefully I can get back in on Friday or next week if lower.

 

[WarpedOne]

In Frankfurt last price was 242,65 EUR or $ 260,42
This think is ballooning...

 

[vgrinshpun]

There were many more shares borrowed in pre-market trading today than yesterday : 181k vs.103k. Interest rate steady at 2%. There are still 207k shares available for shorting at 9:25am.