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2017 Investor Roundtable: TSLA Market Action

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Yea - short-term as defined by a long-term investor. So not in the next few weeks maybe but sooner than people expect.

But my point was I didn't really see anything decisively positive and unexpected in the 8-K

Not sure if I agree. Whether you personally were concerned about M3 damping MS/MX sales or not does not matter for the short term pressure on SP. The fact is that this concern was shared by the majority of market participants, and, which is especially noteworthy, by Elon himself. The ER call seem to have put an ease on this concern as Elon had a remarkable change in the mood, most definitely linked to good internal data on MS/MX orders. The #1 and #3 from the 8-K are further confirmation of the increasing orders for MS/MX.

Looking at my updated chart with the symmetrical triangle up-thread, note that the post ER move, which was probably attributable most to the upbeat commentary on MS/MX demand, was not powerful enough to punch through the upper triangle resistance line. We will see if this 8-K will provide enough fuel to do it this time in a couple of days, but as far as I am concerned the 8-K most definitely was the reason for today's move, and as such is proven to be decisively positive news.

Your implication that 8-K should not be considered decisively positive, because **you** think that SP should be much higher anyway is somewhat backwards imo.
 
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Well as an update to the symmetrical triangle post above, TSLA made a substantial move toward the upper resistance line. The impetus for this move was today's after market 8-K filing , but the interesting question is what should we expect in the second half of the week? Since 8-K form revelations are decisevely positive (more about the developments that provoked this reaction in my post below) it is likely that TSLA will continue going up in the second part of the week. The million dollar question (perhaps a multi-billion one if you are a short) is whether we might see a breakout from this triangle, which would happen at around $264 - $265 level. Get your beverage of choice ready...

View attachment 243368
Just a quick correction: You seem to be short 100 bucks, both in text and in diagram caption. You must mean amounts in the 300's, right? (The speed of this Tesla thing ...!) ;)
 
Thank you for this very detailed post; I really appreciate it.

Have you seen similar traditing patterns in other stocks in your past? Is this unusual characteristic unique to Tesla?

I don't spend significant time following other stocks. TSLA is my gig. That said, I do look at other tech stocks for reality checks and try to see if there's significant examples of mandatory morning dip, capping, and slow descent into closing. For capping, I look for plateaus where the stock moves in a rough but horizontal direction. Overall, TSLA looks pretty unique for the quantity of these types of apparent manipulations when compared to other popular tech stocks.
 
N of one or three; gnat nuts in the great scheme of things. But anecdotal evidence confirming the above theories about today's jump.

Last week one son, my brother and his wife from the East Coast visited and talk of Tesla was banned by my lovely librarian sister-in-law (partly in jest) because I do run on about the stock, our mutual wealth advisor, etc. Nonetheless, I was surprised when they brought up the idea of traveling to Rocklin for a sales visit at the store there. We spent over two hours. My son is really getting hot for exercise of one of our M3 reservations and worried it might go to us or my brother. Not likely for my brother so my son is happy. I advised he get the dual motor version which I insist on if we get one; he insists now on an alert from me when I receive notice I can order. We are probably not interested in an M3 but may spring for an MX next year if the stock continues to appreciate.

My brother and his wife damn near bought the MX on the spot, and have complained the sales gal was contacting them for their decision each day on their return home. That rep also dropped one other hint on the intensity of the sales pitch. At one point I offered what I had discussed years ago with a sales rep in White Plains: "You're not on commission, are you?" "Well, mumble, mumble, "quotas," mumble, mumble, she answered, and quickly changed the subject. I didn't press it but noticed.

Most of the time there I was bored with Tesla. The only thing I was interested in was how to get in or out of a Model S. I couldn't do it alone, this trip, but the sales guy who had some spare time after talking with my son showed me how to do it by sitting down in the seat, side saddle, and then swinging my legs in while tilting head back into the car so my long thorax could pivot behind the wheel. (Arthritic and pleasingly portly to a wife who comes from a poorer country where many are skinny.)

We're going to get an MX if the stock keeps going up. So we confirm there is demand as discussed here and sales effort.
 
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Not sure if I agree. Whether you personally were concerned about M3 damping MS/MX sales or not does not matter for the short term pressure on SP. The fact is that this concern was shared by the majority of market participants, and, which is especially noteworthy, by Elon himself. The ER call seem to have put an ease on this concern as Elon had a remarkable change in the mood, most definitely linked to good internal data on MS/MX orders. The #1 and #3 from the 8-K are further confirmation of the increasing orders for MS/MX.

Looking at my updated chart with the symmetrical triangle up-thread, note that the post ER move, which was probably attributable most to the upbeat commentary on MS/MX demand, was not powerful enough to punch through the upper triangle resistance line. We will see if this 8-K will provide enough fuel to do it this time in a couple of days, but as far as I am concerned the 8-K most definitely was the reason for today's move, and as such is proven to be decisively positive news.

Your implication that 8-K should not be considered decisively positive, because **you** think that SP should be much higher anyway is somewhat backwards imo.

I didn't imply a connection between my SP expectation and 8-K. I simply stated that I didn't see anything fundamanetally positive AND unexpected, which would necessarily lead to a surge in short-term SP. My shirt-term SP expectation was asked separately as a follow-up.

Why would the incentive plan automatically confirm Model S/X sales are doing well? It may LEAD to better sales because it's extra motivation for the VP, but can't be considered a "confirmation." Having said that, however, I do expect, especially Model X, to positively surprise investors in 2H17 for other reasons.

Also, can't the warehouse agreement be related to 7,500 cars Tesla had already planned to lease. Why do you interpret it as additional 7,500 units?
 
These where based on 12-month BFPT at about 5th percentile level, which was $342. The idea is to accumulate at a level for which there is very little downside risk holding for a year or more. The market would have to deeply sour on Tesla to be below this level a year from now. Of course, that could always happen, but if you buy at or below that level of bitter sentiment, it's much easier to ride out.

Oh, well, it's going above $350 now. Better luck next time.

Thank you for this. IIIRC you had estimated ~$330-340 at a higher percentile (20%?) on the way down from $370 about a month ago. Have you recently changed an assumption in your model that led to the "5th percentile" conclusion? Or is it simply passage of ~6 weeks that made such a big difference? Or the 2Q17 results maybe? The 5th percentile estimate is in-line with my fundamentally driven model, whereas the previous ~20% (I don't remember the exact percentile but it was higher) was not. Thanks.
 
FYI, APv2.5 parts list now in the wild. Different front radar and lots of redundancy in wiring/fuses. Plus the addition of a "kill switch". Things may get rocky when all the APv2.0 people realize their hardware won't do FSD..... Might have a bit of a 691HP debacle all over again.

Lack of redundancy doesn't mean the AP2 cars can't do FSD...it just means they can't do FSD while the driver takes a nap :).
 
FYI, APv2.5 parts list now in the wild. Different front radar and lots of redundancy in wiring/fuses. Plus the addition of a "kill switch". Things may get rocky when all the APv2.0 people realize their hardware won't do FSD..... Might have a bit of a 691HP debacle all over again.

The company has clearly stated AP2.0 will do FSD, and if need be, the onboard will be switched at no cost to customer.
 
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