Papafox's Daily TSLA Trading Charts

[Papafox]

Saved by the bell....LOL

Actually, I think it's more the other way around: selling initiated close to closing so that the bell rings just before you run out of horsepower to push the stock down further. Otherwise, if you run out of ammo and the stock starts heading back up, your efforts to push the SP down are diluted.

 

[neroden]

So, how many events this month were identified by us as positive catalysts but ended up dropping the SP? All of them? I still think it has room to drop. Maybe dip to around 180.x, then stabilize around 182-183 before it moves up again. Calling 185 a support level is silly. It only stopped there because the bell rung; it would have dropped lower if it had more time.

I was just explaining the fundamental mechanics behind the concept of "support level". It wasn't intended to be a specific number. If you want to calculate specific support levels, look at something like TSLA Stock Quote | Tesla Motors Inc Stock Price (NASDAQ:TSLA) | Nasdaq: TSLA | 4-Traders

They're currently calculating $181.40.

 

[GoTslaGo]

I was just explaining the fundamental mechanics behind the concept of "support level". It wasn't intended to be a specific number. If you want to calculate specific support levels, look at something like TSLA Stock Quote | Tesla Motors Inc Stock Price (NASDAQ:TSLA) | Nasdaq: TSLA | 4-Traders

They're currently calculating $181.40.

Thanks for the link!

 

[Papafox]

Most of you probably have already seen the extensive post I shared on the short-term thread today. I won't repeat myself. Instead, let me point out some interesting observations that didn't make it into the other piece. Right after open, as the SP headed up in a near-vertical climb, it leveled off around $187.40 for about 5 minutes before resuming its climb. This pause with horizontal trading was most probably an attempt at capping the climb that could not be held. TSLA resumed its near vertical climb until it spent another 5 minutes trading horizontally at $188. Again, this looks like a capping effort that failed. The stock maxed out at about $188.50 and then began it's descent, but at a much less steep angle. I was very pleased to see TSLA twice defeat the capping effort on the way up.

As I mentioned in my weekend post on the short-term thread, one of the methods of defeating the short-induced low volume, end of the day downslope is to understand when it is likely employed and leave some dry powder to take advantage of it. At first, it looked as though longs had pounced on the opportunity and were taking advantage of it, but the selling resumed and the lowest price of the day came just when it was most likely to when such a technique is used, at the very end of the trading day.

Here's something to take a look at. Notice how volume decreased as the day progressed, but volume picked up significantly when the stock started down. This makes sense because it took a lot of selling to push TSLA down on an otherwise positive day with good macros. It wasn't just an increase in volume that suggests strongly that this was short selling. It was isolated large blocks of stocks being sold. Again, a long trying to trim shares would not intentionally sell such large blocks and then go minutes without selling. Instead, a more uniform and smaller selling strategy could shed the same number of shares without pushing the stock price down so far.

What do I expect in trading tomorrow? Unless macros are very good, I expect to see a serious attempt at maximizing the mandatory morning dip. If the SP is driven down at least a couple dollars, then the extensive short selling that occurred today in the $187 range can comfortably be closed at a profit, and the shorts responsible for the extensive capping today have effectively reloaded and set themselves up to continue these manipulations.

The good news? Shorts sold into $389 million worth of TSLA last week and probably around $40 million worth of TSLA today. I doubt they can continue this pace. If longs retain an appetite for TSLA shares in the mid-180s, then the shorts are going to run out of ammo with which to continue the present level of operations as soon as a week from now. The rising interest rate for short shares at Fidelity (growing from 1% to 2%) suggests that the supply of shares to short are drying up. Once the shorts are out of ammo, TSLA is free to climb higher. The bad news? If longs don't recognize what is going on and enough longs sell to depress the stock much below its current level, then the shorts simply reload and continue the game.

Conditions:
* Dow up 89 (0.47%)
* NASDAQ up 47 ((0.89%)
* TSLA 184.52, down 0.50 (0.27%)
* TSLA volume 4.4M shares
* SCTY- delisted and discontinued from this list, starting tomorrow
* Oil 48.67, up 0.43 (0.89%)

 

[neroden]

When do we get the next short interest report? I'm very curious how many of the SCTY shorts (36% of the float!) decide they don't want to be TSLA shorts and buy to close.

Since I'm in it for the long haul, and Elon says he doesn't need to issue equity before Model 3 starts selling, I'd actually rather like it if the shorts piled into TSLA heavily, so heavily that they started paying me interest to borrow my shares again, giving me even more good entry points to buy the stock. Warren Buffett points out that as a long-term investor you want the stock price to be low unless you are planning to sell stock soon.

 

[Papafox]

When do we get the next short interest report? I'm very curious how many of the SCTY shorts (36% of the float!) decide they don't want to be TSLA shorts and buy to close.

Since I'm in it for the long haul, and Elon says he doesn't need to issue equity before Model 3 starts selling, I'd actually rather like it if the shorts piled into TSLA heavily, so heavily that they started paying me interest to borrow my shares again, giving me even more good entry points to buy the stock. Warren Buffett points out that as a long-term investor you want the stock price to be low unless you are planning to sell stock soon.

Short numbers are issued for the first and the middle of each month, and Nov 15th's short numbers will be made available after market close this Friday. I really expect us to be over 30 million.

 

[Papafox]

Today was the day that we knew was eventually coming. We had a good clue it was coming soon because shorts had been drawing down hundreds of millions of dollars worth of shares to short during the past two weeks and not making much progress, considering the effort. Today was the first trading day in many months where the stock demonstrated that the shorts no longer could manage the stock price through various strategic selling maneuvers. Quite simply put, if we can do it today, we can do it again in the future. Today is huge. An up day such as today does two things: it signals to investors that maybe TSLA's trading funk for most of the past year is now behind it. It signals to shorts that trying to pull TSLA down to the 170s just isn't going to happen and last week was when you really wanted to get out of this stock because it's going higher. It confirms my views on the day that the SCTY merger was approved (with an 85% approval percentage and an after-announcement rally) that a black cloud had been lifted from Tesla at long last.

Of course for today to happen you needed sufficient buying pressure to overpower the selling pressure that 200,000 short shares could have delivered. What I had discussed online with vgrinshpun yesterday was "what happens to the SCTY shorts when their shares are converted over to TSLA shares?" I think we received our answer today: many wanted out. As they exited the stock, the price rose and the classic TSLA shorts didn't have the ability to hold them back. Nor does it look like they tried very hard once the train had picked up speed. Maybe once the SCTY shorts have exited, we'll see the same group of TSLA classic shorts still in place, but more likely they see the rising tide and some will bail too. The drawdown (and return) of short shares at Fidelity for today, which Vgrinshpun shared with us, showed a milder drawdown of short shares compared to yesterday and substantial numbers of shares returned today, which is consistent with the scenario described above.

The problem for shorts is that it's often hard to put the genie back in the bottle. If the TSLA classic shorts remain after those SCTY shorts who want to leave are gone, it's going to be harder to cap the stock price because Tesla fever is starting to incubate in the investment world and new money is likely to arrive soon. The controversy of the SCTY merger is now over and institutions may now choose to begin increasing their TSLA holdings.

Most importantly, the psychology of how investors regard this stock is quickly changing. TSLA is viewed by many as a growth company with tremendous upside potential in the future but an inability to trade well in the present. Investors who believed a cloud lay over Tesla because of fears of Trump or fears of the SCTY merger are quickly seeing those fears diminish as they contemplate what TSLA might do in the future. The shorts themselves are certainly humbled by today's events and many classic TSLA shorts may join their SCTY comrades in heading for the door because the prospects of sticking around look too expensive. Once the manipulators diminish, so does the ability to hold this stock back. Today may be seen as the tipping point. We'll see.

What I particularly like about the methodologies we have discussed on this thread is that they worked out to be a really great early warning system that something significant had changed in TSLA's trading today. The breaking through a very solid cap at $186.50 spoke of significant power behind the climb today and the breaching of $188 after a 20 minute battle and the overpower of the 190 barrier on a second attempt pretty much confirmed that we were witnessing a significant shift in the power to break through caps today. Continued strength in after-hours trading bodes well for tomorrow's session. If classic TSLA shorts want to stop this train, they're going to have to throw their might behind it tomorrow, but if institutions are still shedding previous SCTY short shares tomorrow, the job of stopping the train and getting it heading downhill will be difficult.

Conditions:
* Dow up 67 (0.35%)
* NASDAQ up 17 (0.33%)
* TSLA 191.17, up 6.65 (3.60%)
* TSLA volume 5.6M shares
* Oil 48.12, up 0.09 (0.19%)
* News: At least at Fidelity, all SCTY shares converted into TSLA shares today
Dow breaks 19,000 barrier today

 

[Navin]

Great write up. Just throw caution that this is a short week and lots of big money players take off and so tesla will trade on thin volume which could give aggressive shorts a chance to fight the stock. We'll see but definitely a constructive day. I bought ITM Leaps today.

 

[neroden]

Schwab converted SCTY to TSLA this morning. Apparently some brokerages *still* haven't.

No trading tommorrow. Short trading day Friday. Expect thin volume. Things return to normal on Monday and then we'll *really* see what the short term trend is.

 

[Papafox]

Today's trading was encouraging. After the mandatory morning dip was completed, TSLA climbed well into the green. Although TSLA ran into resistance trying to climb much above 195, I suspect natural resistance plus some capping made this a difficult feat today. A fresh morning with help from the NASDAQ would be a far better environment for climbing above 195.

None of the dips I saw today corresponded with dips in the NASDAQ.

What I found encouraging was TSLA's newfound proclivity to fight back when the shorts tried to pull it down during the low volume afternoon hours today. Take a look at that dip right around 1 pm. At 1:05, more than 24,000 shares were sold in a minute and TSLA dipped, but soon popped right back up. Large numbers of shares were sold during the 2:30pm and 3:00pm dips, too. Please check out the volume indicators below. TSLA wasn't the same old Casper Milktoast, go ahead and kick sand my face stock today, however. It staged a nice comeback from the 3:00pm dip.

Reports from Fidelity suggest that we were not seeing much in the way of short covering today. Thus, it's reasonable to assume that new longs were indeed doing some buying today, stirred on by yesterday's nice gains.

Enjoy your Thanksgiving!

Conditions:
* Dow up 59 (0.31%) another record
* NASDAQ down 6 (0.11%)
* TSLA 193.14, up 1.97 (1.03%)
* TSLA volume 4.7M shares
* Oil 48.01, down 0.02 (0.04%)

 

[Papafox]

The big question I hope to see answered in the next few weeks is whether or not we see diminished activity from TSLA's shorts. That diminished activity would be caused by new buyers being attracted to TSLA because of a perceived uptrend, which turns into a real uptrend as more arrive. This uptrend would force some of the well-funded, more pragmatic shorts from their game and diminish the manipulative activities, which in turn would accelerate the uptrend.

Ultimately, Tesla will deliver the Model 3 in volume and the stock price will increase to reflect this new reality, but I am watching to see if we manage to shake loose some of the persistent manipulators or if they hang around, favoring malice for Tesla over profits. So far, I do see a positive change in how Tesla trades, but it has only been two days. The question is, will this positive change grow stronger with time or diminish? The question is only applicable until the certainty of Model 3 ramping in volume and with an acceptable gross margin is understood. At that point it is game over for the shorts and more rational pricing of TSLA returns. A significant contribution by Tesla Energy holds the potential for scaring away the manipulators, but Model 3 remains Tesla's pot of gold, and rightfully so.

 

[Papafox]

Today the positive trend continued for TSLA, with no mandatory morning dip, no apparent capping activity, and no substantial push-down of the stock approaching close. We did see quite a bit of selling to bring TSLA below 196.50, but the selling had limited results. At Fidelity, TSLA saw a drawdown of over 110,000 shares to short, and so we know that shorts continue to use shares to control the rise, rather than our seeing the reverse, which is short covering.

The change of trajectory began the day of the SCTY merger announcement, with TSLA breaking into the green mid-morning and building upon the gain in after-hours trading when it was reported that 85% of TSLA investors voted to approve the merger. The following Friday was a down day for TSLA, as shorts sought to put a negative spin on the decision through short selling right at market's open, and they were likely helped by a few disgruntled or nervous longs jumping ship. Monday saw a nice rally of about $3, extensive capping at 187 for most the day, and then a drive lower in the low-volume afternoon hours that brought TSLA into the negative by 25 cents. Monday was the last day when the activities of the shorts proved productive, however. On Tuesday TSLA rose more than $6 with no successful short strategies apparent, and on Wednesday TSLA rose nearly $2 even though a mandatory morning dip and low-volume, late afternoon selling were employed.

Today's gain of $3.51 continues the trend upward. If TSLA can continue this uptrend through next week it will continue to draw new investors and a positive finish before the weekend should bode well for Monday morning's trading. What I'm most looking for is whether the old short techniques will regain their strength or whether the uptrend will overpower these techniques. There's no evidence so far of shorts jumping ship. Some will stay for the duration, but others (who are here to make money) will depart at some point. If the shorts who have been so successful during the past half year with their creative trading strategies are the ones who leave, then it's upward and onward for TSLA's stock price. If not, there'll still be the opportunity for slow upward progress in moves such as we've seen during the past week until we reach some production milestone for TSLA (at which time it can rise quite a bit faster).

It's entirely possible that the creative trading shorts will jump on either bad news for Telsa or a down macro day to retest the power of their old tricks. How well TSLA weathers this test is important. Expect resistance from the shorts as TSLA tries to cross the 50DMA next week. If we rise above it, expect another new wave of investors to start buying as the media gives coverage to TSLA's positive trend.

Conditions:
* Dow up 69 (0.36)
* NASDAQ up 18 (0.34%)
* TSLA 196.65, up 3.51 (1.82%)
* TSLA volume 2.3M shares * Note that today the market closed early at 1pm ET
* Oil 46.42, down 1.54 (3.21%)

 

[Papafox]

Today started out with 115,000 shares being sold in the first minute of regular trading. This selling does not make sense for a long reducing holdings. Nonetheless, after the mandatory morning dip, the stock topped $198.50 about four times in quick succession and then another time about an hour later. Sell orders being triggered do not make sense and therefore this work looks like capping behavior. A slow decline going into the afternoon was followed by a steep dip during the final hour. The NASDAQ did not share the slow decline in the afternoon but the steep dip near end of trading was present on the NASDAQ, too. The steep NASDAQ dip in late trading might carry over into trading on Tuesday.

Overall, I think that if you consider the incredible selling during the first minute of trading, the stock did fairly well in the morning. Buyers continue to come forward. The green plateau in after-hours trading is a purchase of 7200 shares. Again, we are seeing buyers more plentifully than before.

Overall, the shorts appear to be demonstrating morning dip, capping, and afternoon downward sloping selling, but these shares must have come from IB because Vgrinshpun's data from Fidelity shows light covering. A drop in interest rate for shorting at Fidelity also hints at less demand for short shares, which is interesting.. Shorts continue to get less results for the buck, compared to three weeks ago and further out.

Conditions:
* Dow down 54 (0.28%)
* NASDAQ down 30 (0.56%)
* TSLA 196.12, down 0.53 (0.27%)
* TSLA volume 4.4M shares
* Oil 46.7, down 0.38 (0.81%)

 

[ev-enthusiast]

View attachment 203876
Today started out with 115,000 shares being sold in the first minute of regular trading. This selling does not make sense for a long reducing holdings. Nonetheless, after the mandatory morning dip, the stock topped $198.50 about four times in quick succession and then another time about an hour later. Sell orders being triggered do not make sense and therefore this work looks like capping behavior. A slow decline going into the afternoon was followed by a steep dip during the final hour. The NASDAQ did not share the slow decline in the afternoon but the steep dip near end of trading was present on the NASDAQ, too. The steep NASDAQ dip in late trading might carry over into trading on Tuesday.

Overall, I think that if you consider the incredible selling during the first minute of trading, the stock did fairly well in the morning. Buyers continue to come forward. The green plateau in after-hours trading is a purchase of 7200 shares. Again, we are seeing buyers more plentifully than before.

Overall, the shorts appear to be demonstrating morning dip, capping, and afternoon downward sloping selling, but these shares must have come from IB because Vgrinshpun's data from Fidelity shows light covering. A drop in interest rate for shorting at Fidelity also hints at less demand for short shares, which is interesting.. Shorts continue to get less results for the buck, compared to three weeks ago and further out.

Conditions:
* Dow down 54 (0.28%)
* NASDAQ down 30 (0.56%)
* TSLA 196.12, down 0.53 (0.27%)
* TSLA volume 4.4M shares
* Oil 46.7, down 0.38 (0.81%)

Papa, did you sort of expect this Monday's SP movements as this is a normal work week after holiday week last week?
I could imagine that some players have not been active during last week.

 

[Papafox]

Papa, did you sort of expect this Monday's SP movements as this is a normal work week after holiday week last week?
I could imagine that some players have not been active during last week.

Monday mornings are historically good when an uptrend carries into the weekend and when good news is released over the weekend. Monday's after a three-day weekend are typically even better, if there are reasons to be bullish about TSLA, but we didn't have a true three of four-day weekend this time around. The shorts were worried about Monday and sold probably the vast majority of the 115,000 shares traded in the first minute. That sale brought about the mandatory morning dip and dissuaded some buyers temporarily, but the stock nonetheless ran up to 198.50+, which was to my eye a surprisingly strong recovery from the dip.

Typically, Tuesdays are the most difficult day of the week for TSLA, so one has to consider that issue when trading. It'd be interesting to see just how profitable a buy on Tuesday low and sell on Monday high strategy might be.

 

[Papafox]

Today we had a chance to see that the combination of FUD plus short-selling (suggested by fidelity numbers) did to the stock price. Unfortunately, this combination still looks quite capable of inducing large moves, and so the longs are clearly not seeing a significant reduction in the effects of creative short selling yet. Much of the degree of drop today came about because of this being the first substantial drop for new TSLA investors since they came into the stock.

We see these kind of induced declines after large buy-ins by new longs in order to weed out the weak longs and those with conservative stop-loss settings, and today was that day for the new longs who entered during the past two weeks. This type of a dip then allows the shorts who had been selling in extensively over the past two weeks to reduce some of their holdings profitably. As long as the shorts can figure out how to make money by manipulating TSLA, they will continue to do so. An uptrend followed by a downtrend works for them, as well as a prolonged downtrend. On the other hand, a long uptrend is indeed problematic for the shorts who are doing the manipulations.

On the positive side, vgrinshpun shared that Ihor Dusaniwsky on Nov 23 reported that the large gain in TSLA shorts over the past two weeks did not include SCTY shorts because the conversions haven't happened yet. The implication here is that:
1) the uptrend we saw for the previous two weeks was not affected by SCTY shorts covering
2) we still don't know if SCTY shorts will start buying to close positions once their conversions take place

Conditions:
* Dow up 24 (0.12%)
* NASDAQ up 11 (0.21%)
* TSLA 189.57, down 6.55 (3.34%)
* TSLA volume 4.4M shares
* Oil 45.26, down 1.82 (3.87%)
* FUD: Mark Speigel comments at big conference, Twisting by media of SEC comments regarding TSLA non-gaap reporting in the past (SEC said their concerns have already been addressed)

 

[Papafox]

Note: www.shortanalytics.com says that shorts comprised 61% of the trading in TSLA today. Since the trend was clearly downward for the stock, the implication is that there was plenty of short-selling into new positions today or plenty of sell at critical moment, buy to cover lower, then repeat.

 

[Papafox]

I'm posting this incomplete daily chart here because the short-term thread is not very receptive to discussions of shorts right now. What you see is classic dips and near recoveries of short-selling in the morning hours. The next thing we see is extended horizontal trading just below 188.50. This is, I believe, shorts holding the line on further increases by the longs.

Now I see an excursion below 188.50, which is the shorts testing the longs to see if volume is low enough and long fatigue is high enough to enable a probe lower. Again, the low volume afternoon hours are a good environment for the shorts to try pulling the stock lower. Notice the increase in volume needed to get that little dip below 188.50. That was a sale of about 6,000 shares, which is quite a bit less than the 10,000-20,000 shares needed to move the SP when we're in the first hour of trading.

OK, that probe below 188.50 was unsuccessful, so they've gone back to capping 188.50 and will try again later in the day if the 188.50 holds.

I wonder if the shorts know we have a copy of their playbook, hehe.

 

[Papafox]

What a difference a day makes. Yesterday, we saw the shorts pull TSLA down in much the same fashion as they did a month ago. Today, we saw quite a different picture. Pre-market trading was positive, which indicates that the small investors felt TSLA was ready to go up today. The inevitable mandatory morning dip came as the more than 100,000 shares the shorts made available today were employed. You can see that on what was going to be Day 2 of the push by shorts to continue the downtrend for TSLA that today didn't work very well for them and today instead indicated that the shorts are dealing with a changed environment for TSLA trading ever since the SCTY merger was approved by overwhelming numbers.

Here's the NASDAQ chart for today. Notice the disconnect from TSLA trading

What I am monitoring is the amount of ammo that shorts need to use to pull TSLA down or keep it from running up too fast, and what I am seeing is that the shorts are getting little bang for their buck on most days now. Take a look at the afternoon trading:
* 12:45pm- The latest dip didn't take, and so shorts set out to cap at 188.50
* 2:00pm- Shorts try to push TSLA lower but the attempt is overpowered by longs and shorts return to 188.50 capping
* 2:32pm- Shorts try to push TSLA way down with nearly 20,000 shares sold within a minute. Cap is reset just above 188
* 3:30pm- At about the time you'd expect shorts to try for the big push down, they lose control of 188 cap and SP rises into the close. Volume sometimes reached 10,000-15,000 shares/min. during last 30 mins of trading
* 4:00pm- An attempt is made to pull TSLA down below 189 but it fails

so... I'm back to thinking that the shorts are losing their ability to steer TSLA without committing lots of resources, and since they are so heavily committed already from the past 2 weeks, the question arises: will they start covering as TSLA rises? Probably not, but the time is drawing nearer.

Please note the substantial increase in oil today.

Conditions:
* Dow up 2 (0.01%)
* NASDAQ down 56 (1.05%)
* TSLA down 0.18 (0.09%)
* TSLA volume 3.5M shares
* Oil 49.13 up 3.9 (8.62%)
* News: Chance of an OPEC agreement sends oil prices up 8%

 

[Papafox]

A Wednesday Observation

I watched the trading today quite carefully. What I saw is that when the short who was capping at 188 made a move down, there was an immediate counter-move. Sometimes there was a move up and the short had to counter that. I thought that we either had an institutional buyer doing a slow but steady loading up of shares or that we at last had a large long defending the price. When I saw that 65% of trading was done by shorts today, I realized we were seeing a contest this afternoon between shorts: one or more selling in an attempt to hold the price and then push it down when possible and another buying to cover. The big run-up at the end of the day could have been the covering short speeding up the buying to complete the exit today.

I now want to see what happens tomorrow. Maybe this was a one-time event and the short doing the buying now has closed his positions and he's no longer a factor. What I'm hoping is that this short covering today is the beginning of a trend we see in the coming weeks leading up to the Q4 delivery numbers being revealed.