Papafox's Daily TSLA Trading Charts

[Papafox]

Today was a better day than yesterday and gave indications that the bottom might be near. Notice the positive pre-market trading and the up and down trading during opening hour. This opening hour was a tug-of-war between bears and bulls or between shorts and longs, however you wish to see it. Two attempts were made to penetrate 210, and both rebuffed. Also, take a look at the closing half hour of trading today and yesterday. Yesterday, the shorts (or bears) still had control of the SP and TSLA descended into the close. Today, the bulls or longs had control at closing and we climbed into the closing. Then, shortly after closing, TSLA ascended another $1 before falling back. I think these indications reveal uncertainty among the shorts that they may miss the bottom if they hold into tomorrow's trading.

In the short shares available thread, Mario today says that the number of shares available to short at IB has expanded today. This development might prolong the battle if the cause of the shares availability was the brokerage working to free more shares for lending (and therefore for making money with). If the shares came about because of shorts starting to cover, the additional shares would tell a different story. We'll see tomorrow.

Conditions:
Dow down 49 (0.26%)
NASDAQ down 9 (0.18%)
TSLA 211.34, down 3.86 (1.79%)
TSLA volume 3.1M shares
SCTY 20.69, down 0.77 (3.59%)

 

[Papafox]

Whereas yesterday provided an improved picture of trading, today TSLA entered the mixed green and red trading common to a turnaround of momentum, with a positive trajectory heading into green at close. Unless new info surfaces, we should reached the bottom. Interestingly, some technical traders have been looking at 210 as the bottom as well.

Notice the deep plunge about half an hour into regular-hours trading followed by partial immediate recovery, which is indicative of strategic short selling.

One odd issue is the availability of shares to short. At Fidelity, the brokerage is out of short shares, which partially explains the turnaround in trading momentum, while at IB shares are apparently becoming more available.

At this point, shorts have a good exit price, the downtrend appears to have abated, and with the probability of good Q3 delivery numbers only about a month away, there seems to be little reason why a short would remain in TSLA once the run up begins.

Conditions:
Dow down 53 (0.29%)
NASDAQ down 10 (0.19%)
TSLA 212.01, up 0.67 (0.32%)
TSLA volume 3.3M shares
SCTY 20.66, down 0.03 (0.15%)
News: SEC S-4 document released, Tesla announces plan for another capital raise before end of year, Musk tweets positive comments about upcoming 8.0 or 8.1 release of autopilot software.

 

[ev-enthusiast]

Papafox, how big of an impact do you think could availability of shares to short have during a trading day like yesterday?

 

[ev-enthusiast]

Papafox, did volume increase during yesterday's run up into the close?

 

[Papafox]

Papafox, did volume increase during yesterday's run up into the close?

Ev-enthusiast, unfortunately, my chart didn't depict volume for Wednesday's trading and nothing struck me as notable about the change of volume in the day (other than the highest volume taking place as usual in the opening hours).

As a general rule, when shares to short run out, we usually see a positive effect on the SP. I believe it's not so much the quantity of selling the shorts are doing when entering new positions, it's more the method of their buying, which favors psychological impact such as a deep plunge near opening or pushing the SP down on very low volume during the late afternoon hours.

 

[Papafox]

Looking at the chart, you do not see the deep dips and quick partial recoveries of short-selling, and so one can conclude that the drop in SP today was primarily attributable to selling by longs. I saw no new negative news today about Tesla, only a rehash of yesterday's news and the emotional impact of a Falcon 9 rocket blowing up on the pad. For these reasons, the drop today can be mostly attributable to emotional responses. In fact, two positive news items came out today: good InsideEV delivery numbers for TSLA for August and a report that a Lazard evaluation of Solar City's value improperly overstated debt by $400 million. As the emotions drop over the coming three-day weekend and the good news has a chance to circulate, we could see a nice rebound on Tuesday. Tomorrow's trading is more of a question mark.

SCTY is now trading at .0935 times the price of TSLA, discounted substantially from the planned exchange rate for TSLA shares. The broadening gap between the two SP values indicates some concerns whether the merger will go through or not. Of course this is an arbitrage opportunities for individuals who feel certain that the merger will go through, but there is risk involved.

Conditions:
* Dow up 18 (0.10%)
* NASDAQ up 14 (0.27%)
* TSLA 200.77, down 11.24 (5.30%)
* TSLA volume 7.9M shares
* SCTY 18.78, down 1.88 (9.10%)

 

[Papafox]

Over in the tracking short interest thread we see the likelihood of hundreds of thousands of new shares to short being made available in the past couple of days, at a time when TSLA had just dropped below the important support level of 220. Why didn't we see the characteristic up and down spikes of strategic short-selling much of the day today, then? I think part of the answer has to do with the disheartening aspect on longs of the Falcon 9 loss this morning and the over-hyped liquidity concerns being stirred up by the media, when coupled by the difficult-to-understand severity of the SP drop today. Also, many longs had begun purchasing in the range just above $210 and weren't inclined to try catching falling knives when the drop looked so relentless. For these reasons, I am now inclined to believe that short-selling did indeed have much to do with the SP drop today.

 

[Papafox]

Anyone else ready for a three-day weekend to restore some sanity to the balance of good news vs. bad for TSLA? The news cycle has been locked on negative for a few days now, even though some positive stories such as the InsideEV August delivery numbers and the Lazard $400 million overstatement of SCTY debt have surfaced.

Looking at the trading today, you see buyers out there in pre-market and during the opening hour, but the bears ruled until about 2 pm, when we saw TSLA start an uphill climb. I did buy a leap near the bottom today and feel that the worst is over, but a climb back into the green before closing would have been necessary to forcefully define the bottom. A climb into the Friday close is a positive development, particularly when volume is significant. My biggest concern for next week would be any negative macro events, as TSLA seems to have just about worked out this latest round of Tesla news.

Conditions:
Dow up 73 (0.39%)
NASDAQ up 23 (0.43%)
TSLA 197.78, down 2.99 (1.49%)
TSLA volume 5.9M shares
SCTY 18.48, down 0.30 (1.6%)

 

[Papafox]

Lacking a chart because the NASDAQ is closed on Labor Day, I borrowed this chart of TSLA from the Frankfurt exchange. Keep in mind that the entire trading was a bit over 3,000 shares, an amount that often trades hands in one minute on the NASDAQ. Nonetheless, the chart is encouraging
Gain: 1.87%
Close 179.35 Euros = $200.01 dollars

Notice that the stock began the day with a nice gap up from the previous close, ran up and down as stocks do, but generally showed a climbing trend throughout the day. Looking forward to Tuesday's opening, as I believe last week's $20+ loss was, in the words of Ben Kallo of Baird, "caused by recycling of old news."
http://blogs.barrons.com/stockstowatchtoday/2016/09/02/tesla-motors-nothing-to-see-here/

 

[TrendTrader007]

View attachment 193248
Lacking a chart because the NASDAQ is closed on Labor Day, I borrowed this chart of TSLA from the Frankfurt exchange. Keep in mind that the entire trading was a bit over 3,000 shares, an amount that often trades hands in one minute on the NASDAQ. Nonetheless, the chart is encouraging
Gain: 1.87%
Close 179.35 Euros = $200.01 dollars

Notice that the stock began the day with a nice gap up from the previous close, ran up and down as stocks do, but generally showed a climbing trend throughout the day. Looking forward to Tuesday's opening, as I believe last week's $20+ loss was, in the words of Ben Kallo of Baird, "caused by recycling of old news."
http://blogs.barrons.com/stockstowatchtoday/2016/09/02/tesla-motors-nothing-to-see-here/

I think we have bottomed and TSLA should go up starting tomorrow. It has has been down straight for 5 weeks and similar to down ward activity in June which reversed with a strong white candle we have probably hit bottom on Froday and short squeeze may start any day now based on positive fundamental events this weekend that is leak of Elon email plus autopilot update coming soon
Don't forget that TSLA stock has been down straight 5 quarters I bet we go up next quarter
And I'll be watching the quarterly candle closely until end of September

 

[Papafox]

As expected, TSLA shed its red ink after the three-day weekend and returned to recapture some of its lost ground of the previous week. A gain of $5 is a substantial reversal. A fade after the opening hour was not surprising particularly with the broader markets dipping, but the stock regained its bull legs and closed strongly.

Conditions:
* Dow up 46 (0.25%)
* NASDAQ up 26 (0.50%)
* TSLA 202.83, up 5.05 (2.55%)
* TSLA volume 4.4M shares
* SCTY down 0.04 (0.22%)

 

[Papafox]

I have included an after-hours trading chart for today because of the positive finish. Generally, after-hours sessions that finish well indicate that we'll see a positive start to the next day's regular trading session.

Regular trading ended at 202.83
After-hours trading ended at 203.5

 

[neroden]

Whelp, I probably closed some of my options positions on a bad day on Friday, but I needed to secure the cash for expenditures; I was accidentally overinvested. We'll see how the options markets go approaching September 16, which should be a very interesting week...

 

[Papafox]

Whelp, I probably closed some of my options positions on a bad day on Friday, but I needed to secure the cash for expenditures; I was accidentally overinvested. We'll see how the options markets go approaching September 16, which should be a very interesting week...

Bummers on the timing. Hoping you are going to be positioned well in early October.

 

[neroden]

Oh, it's not so bad; because they were short puts most of them were actually closed at a profit thanks to time value decay. Just not as *much* of a profit as I would have liked. I should be set until January now.

 

[Papafox]

The positive close of trading yesterday carried over into the beginning of TSLA trading today, with TSLA running above 205 before word spread of a fatal Model S accident in the Netherlands and that one piece of news brought conflict to the trading. You can see the conflicted trading with a return twice to green mid-day and much uncertainty of direction. On the one hand, you have the bulls who expected TSLA to run higher today but they tempered their buying because only a single positive trading day has so far suggested that the stock has completed its downrun. You have the bears who are fearful (or hopeful, in the case of shorts) that the accident was caused by autopilot and newfound criticism could then be heaped upon Tesla and especially upon Musk personally. Since the vehicle in question was traveling at a high rate of speed, it is more likely in my mind that it was being hand-driven rather than running on autopilot.

A day of confused trading between green and red often marks a change of direction for a stock, but in this case I think the event that stopped TSLA's ascent will be neutralized shortly when Tesla reveals the details of what they learned, and then the ascent can resume. The effect of the accident in the Netherlands was similar to the Falcon 9 explosion last week in that both these events worked on the emotions but as time goes by we will see they likely have little bearing upon the value of TSLA stock.

Conditions:
* Dow down 12 (0.06%)
* NASDAQ up 8 (0.15%)
* TSLA 201.71, down 1.12 (0.55%)
* TSLA volume 3.6M shares
* SCTY 18.06, down 0.38 (2.06%)

 

[kenliles]

Quick note of thanks P-fox. Even for long term holders who rarely trade (I'm one of those), your summaries are a staple read. Thanks so much for your excellent, balanced analysis of daily events and associated effects on TSLA - A definitive, valuable service to the forum and its members.

 

[Papafox]

Yesterday's move from rising SP to uncertain trading signaled to some investors that today could be a down day, and thus it became a self-fulfilling prophecy. As you may recall, I speculated that much of the change of emotion from bullish to uncertain could possibly be attributed to the Netherlands high-speed accident where a driver ran off the road and was fatally injured after hitting a tree. A driver's death is still a tragic event, but it doesn't carry the weight to TSLA's value of a death caused while operating on autopilot. After the close of trading today, a story revealed that the Netherlands Tesla was not using autopilot, and thus the speculation that precipitated yesterday's change of momentum was unfounded. My guess is that tomorrow will move into uncertain trading again, which would set us up for a positive day on Monday. Even better would be a move to positive trading tomorrow, but performance of the broader markets and the amount of FUD released in the next 24 hours will impact TSLA's change in trajectory.

Apparently, at the SCTY website, a document has been posted which sets a record date for the vote on the merger as Sept 19. Let's watch to see if the same date is used at Tesla for a record date. If so, we could see some SP climb between now and Sept 19 due to the recalling of short shares by brokerages that wish to vote on the merger.

Conditions:
Dow down 46 (0.25%)
NASDAQ down 24 (0.46%)
TSLA 197.36, down 4.35 (2.16%)
TSLA volume 3.4M shares
SCTY 17.44, down 0.62 (3.43%)

 

[adiggs]

recalling of short shares by brokerages

And those retail investors! Some of them want to vote to, and will be recalling their shares

We may add up to a hill of beans, but with the huge open short position, I figure there's going to be stress at the margin, whether there's a squeeze or not. I think we'll start seeing this manifest in the interest rates associated with shorting TSLA and SCTY (where owners recalling shares reduce the number of shares to short, thus driving up the rates to push shorts out of the market AND pull shares to be loaned back into the market).

 

[Papafox]

And those retail investors! Some of them want to vote to, and will be recalling their shares

We may add up to a hill of beans, but with the huge open short position, I figure there's going to be stress at the margin, whether there's a squeeze or not. I think we'll start seeing this manifest in the interest rates associated with shorting TSLA and SCTY (where owners recalling shares reduce the number of shares to short, thus driving up the rates to push shorts out of the market AND pull shares to be loaned back into the market).

All good points. I bought more shares after hours to be sold during the first hour of trading Monday (like I did last week) if I see the Monday rise weakening or to be held longer if I see the trading pushing TSLA upward with strength. Between the news of no autopilot use with the Netherlands accident and the week of Sept. 19 record date, I feel we're likely going to see a positive transition very soon.