Papafox's Daily TSLA Trading Charts

[Papafox]

Today was indeed a consolidation day. What started out as a negative consolidation turned into a slightly positive consolidation, and then news came of a fed concern about when the economy will perk up and a Speaker Ryan statement that the White House and Congress are farther apart on tax changes than they were on health care. The net result was a drop in the broader markets and an exaggerated drop for TSLA as investors took profits, fearing a bigger drop.

One must now ask the question: Was yesterday the top of a big run up that is over and we return to the historical trading range (as shorts believe), or was today a normally volatile trading day for TSLA as it consolidates before heading much higher this year (as many longs believe)? The approaching Model 3 ramp up, the Tencent investment in TSLA, and the good Q1 delivery numbers all suggest a move to a higher trading range. If you are in the bullish long camp, then you will likely look at dips as buying opportunities for the big run up ahead this year. Shorts may feel emboldened from the run up so that they try to double-down at opening tomorrow morning and see if they can depress the stock further. Watch the short numbers tomorrow morning. It's also a tempting opportunity to cover for shorts who missed the chance earlier, so the net shorting activity is no certainty for the morning. Fidelity has been rationing the available shares to short in recent months, marking a fundamental change to the power of the shorts to manipulate the stock, and this change should also be taken into consideration.

Taking a look at the technical chart, you can see the upper bollinger band at 301.23 and TSLA at 295, which gives the stock plenty of room to run upward tomorrow if the market turns bullish again on TSLA. My guess is that we will see TSLA running below the upper bb for the most part in the coming months but poking above it when good news comes forth. Runs above the upper bb will seldom exceed two days, but once shorts start covering in numbers, that prediction goes out the window. Overall the upper bb is still relevant in TSLA trading, as we saw today even before the afternoon dip.

Conditions:
* Dow down 41 (0.20%)
* NASDAQ down 34 (0.58%)
* TSLA 295.00, down 8.70 (2.86%)
* TSLA volume 7.7M shares
* Oil 50.87, down 0.16 (0.31%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: 193,000 drawdown, 1.00% interest

 

[Papafox]

Today the consolidation continued after the recent run up. If you look at the technical chart you will see that TSLA is trading very evenly with the close on Monday when TSLA left the 270s behind and landed in the high 290s. Lessons? Unless shorts are covering in a big fashion, expect a consolidation after two days of trading above the upper bollinger band. The good news is that consolidation just below 300 sets the stage for a higher climb in the stock when additional good news comes forth. It also challenges the short thesis that TSLA is merely bumping the high end of the trading range a bit before heading back down.

Regarding Monday's and Tuesday's big climbs while above the upper bb, I had expected TSLA to close just slightly higher than Monday's close on Tuesday and it did not. Give us two more days, however, and TSLA is now trading right about where we'd expect it to be if Tuesday's gains had been slight. Perhaps the severity of Wednesday's drop was merely to place TSLA where it should have been after such a large jump up, (relative to the upper bb) and today was fine-tuning of that adjustment. Short term traders take notice.

Regarding the news of U.S. military action, I suspect the market response will be muted because the response was limited and not denounced by most other nations. The market reaction could change, however, if Russia or Syria respond in a provocative fashion.

Conditions:
* Dow up 15 (0.07%)
* NASDAQ up 15 (0.25%)
* TSLA 298.70, up 3.70 (1.25%)
* TSLA volume 5.5M shares
* Oil 52.84, up 1.14 (2.21%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: N/A
News: The U.S. hit a Syrian Air Base this evening with 60 cruise missiles in response to the Syrian president's use of nerve gas

 

[Papafox]

Daily chart chatter- Traders who expected TSLA to do fine today despite yesterday's military action placed nearly 148,000 buy orders for the opening bell of the market today. They were amply rewarded. It appears shorts tried a mandatory morning dip that had minimal effect.

Technical chart chatter- It's time to take a look at the technical chart so that we can see how trends have changed during TSLA's climb from the 180s up to its current valuation. Notice on the climb up that the trading largely stayed just below the upper bollinger band and that excursions above the upper bb seldom lasted more than 2 days. Notice, too, how the occasional consolidations typically involved negative movements. Notice that many of the consolidations lasted about 5 days while a few lasted about twice as long. So, what has changed?
* Consolidations have been positive the last two weeks (versus negative, previously)
* Gains over the past two weeks involve more gapping up than before
* TSLA is comfortable moving into a new trading range now. Look at the hard bounce TSLA experienced off the 280s, which led to momentary trading in the 240s. Although we received a Tuesday bounce out of the 300s, we're back now. The shorts' thesis that TSLA only trades in the 180-280 range is officially dead.

Conclusions:
* TSLA completed a consolidation after less than 5 trading days this time and today was a move higher
* Monday holds the potential for continuing gains as the upper bb is offering room to run

Be sure to read recent posts by @luvb2b in the Investor's roundtable: general discussions thread. His research into Tesla's SolarCity assets suggests they could add enough income to Q1 so that Tesla shows its best quarter yet in terms of revenue and income. A strong Q1 ER would be enough to send TSLA quite a bit higher.

For the week, TSLA closed at 302.54, it's first weekly close above 300 ever. With last Friday's close being 278.30, this week's gains were $24.24. Add in last week's $15+ gains and TSLA is up more than $39 in the past two weeks. Enjoy your weekend.

Conditions:
* Dow down 7 (0.03%)
* NASDAQ down 1 (0.02%)
* TSLA 302.54, up 3.84 (1.29%)
* TSLA volume 4.4M shares
* Oil 52.3, up 0.6 (1.16%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: NA

 

[neroden]

Gotta use up those cruise missiles somehow, so that the contractors can sell more of them. (Am I cynical? Yes.)

 

[GoTslaGo]

Just wanted to point out the Candlestick pattern which repeated itself consistently over the last 2 months, preceding the up moves.

March 10-11, March 21-22, and now April 5-6.

Longer red days with a following smaller green day within the body of the red, is known as a Harami+ candlestick pattern. Inexplicably TSLA seems to like this pattern (I've pointed this out in the technical thread, it occurred on the weekly in Nov/Dec and signaled the upward reversal). TSLA tends to ignore the opposite Harami- pattern (long green with small red supposed to signal a bearish reversal).

One can argue that March 29/30 is a Harami Doji+. But I think it's too small.

Interestingly it wasn't a terribly common pattern most of last year on the daily. Now I've seen it happen 3 (almost 4) times in 2 months....

 

[Papafox]

Today TSLA experienced its third gap-up Monday in a row. What's interesting if you look at the technical chart is that today's gap up trading took place just below the upper bollinger band. My latest working rule is that TSLA seldom trades above the upper bb for more than two days in a row before a consolidation (except when shorts are covering heavily). What should we expect for tomorrow? Typically, we see two big days in a row and I don't think Friday was enough to count as a big day, so I wouldn't be surprised if we see another gain on Tuesday. The stock would then exceed the upper bb, which would likely mean it's time for consolidation. Fortunately, the consolidation for the past few weeks has been slightly upward. Adding fuel to the rally is lots of positive news today: strong chatter on CNBC, Piper Jaffray upgrade, and Tesla exceeding GM to become the most valuable U.S. car maker. Congratulations longs ; )

When should we expect the inevitable peak and correction from this monster climb? It could, of course, happen at any time, but momentum is still very strong for this stock and both the 1Q ER and the Model 3 final reveal plus beginning of construction still lies ahead. I found the Piper Jaffray upgrade interesting because it was based upon an assumption of no profits from Tesla until 2019. For this reason I see Q1 ER as something I wish to hold through, rather than play a dip game. If TSLA loses money, it is already assumed that this is the quarter's outcome, and fallout would be slight. If TSLA shows a profit, as luvb2b believes is likely, then it's off to the races as a significant selling event by shorts takes place.

Conditions:
* Dow up 2 (0.01%)
* NASDAQ down 3 (0.05%)
* TSLA 312.39, up 9.85 (3.26%)
* TSLA volume 7.5M shares
* Oil 53.18, up 0.1 (0.19%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: 196,000 shares drawdown, 1.00% interest
* News: Tesla exceeds GM and Honda in market cap

 

[Papafox]

Pre-market trading suggested another up day for TSLA, but significant forces pulled TSLA in the opposite direction today. The opening-bell trading was a very robust 236,000 shares. Due to the sharp downward spikes and the immediate near recoveries, I wouldn't be surprised if we saw a large short selling in, trying to shake up the TSLA investors a bit. As noon approached, however, buyers materialized and removed a large portion of the dip. Another possible scenario is that this is historically the week when people selll stock to pay for income tax. Next week is supposed to be a better week, historically, we will see. For the time being, TSLA is in consolidation mode again.

Conditions:
* Dow down 7 (0.03%)
* NASDAQ down 14 (0.24%)
* TSLA 308.71, down 3.68 (1.18%)
* TSLA volume 5.6M shares
* Oil 53.53, up 0.13 (0.24%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: NA

 

[Papafox]

As with many of you, I was surprised by the size of the correction to TSLA today. When looking at a stock that has run up from 180 to 285, consolidated down to below 250, then ran to 312, this is not out of character for a volatile stock such as TSLA, however. If we were discerning, there were hints of a correction coming, though. TSLA did not close higher, as many of us were expecting yesterday, and instead of consolidating in a slow climb, as it had the previous two times, it descended. Ah, a break in the pattern (what could it mean?). Yesterday's after-hour trading showed a somewhat steady decline. Next time, maybe we catch it.

The day began poorly as the broader markets dipped, due to concerns about Syria and North Korea. About 2 pm the broader markets reclaimed some lost ground but TSLA did not follow (Ah, another clue). Instead, we saw the combined forces of "I need tax money" week, bad macros, and a temporary reversal in momentum from positive to negative cause some TSLA traders to jump ship. I suspect they're likely to come back aboard when the stock price demonstrates it has bottomed, and so we might see a nice run up after a bottom is shown and investors ponder "Is this my last chance to get back in under $300?"

Although you can see from the NASDAQ chart that its decline started TSLA on its way down today, at some point TSLA took on a trajectory all its own.

@Paracelsus has this interesting post which suggests that TSLA is testing for its new support level just as it did in 2013 before the May ER in which TSLA took off in price to hugely higher ATHs. Let's see what the support level is and how quickly we regain lost ground to see how closely we mimic the 2013 trading. I think much depends upon macros at this point. While TSLA is perfectly happy disregarding the macros when it is trading on news, during times of ambiguity such as the present, macros can indeed influence the stock.

Regarding the decision to play a dip or not, we found ourselves in this same situation when TSLA headed into the 280s on the way to where we are now. If you were skillful (or lucky) enough to sell some holdings at 280-285 and re-buy below 250 you did well. Similarly, if you were lucky enough to sell at 312 and re-buy below 300, you will do very well too. The problem is that it's really hard to call the top most of the time, and those investors who held through the previous dip are in fine shape today. What you want to avoid is being the dip trader who sells too late or buys back in too late. This stock goes up as fast as it goes down. We're at an exciting time for Tesla and its investors and will see plenty of appreciation ahead in anticipation of Model 3 entering production. The dip to avoid missing is the big one after the shorts jump ship en masse. The SP will be considerably higher when that event happens. Don't miss it.

Conditions:
* Dow down 59 (0.29%)
* NASDAQ down 31 (0.52%)
* TSLA 296.84, down 11.87 (3.85%)
* TSLA volume 5.9M shares
* Oil 52.9, down 0.50 (0.94%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: NA

 

[Papafox]

Well, the after-market trading barometer shows a minor clearing trend (297.20-296.84= $0.36 gain), so it hints that we should expect less rain and some sun shining through the clouds tomorrow.

 

[Papafox]

Today's NASDAQ trading. The influence only worked until Elon sent out his tweets

Today started out with positive sentiment suggested by a slight uptick in after-hours trading yesterday. TSLA received a tailwind from broader markets heading higher and it reclaimed some lost ground from yesterday. Then Elon tweeted that Tesla Semi-truck would be revealed in September (plus Model 3 reveal in July and Pickup in 18 to 24 months) and TSLA shot up.

Comparing TSLA to the NASDAQ today, you can see the influence of the NASDAQ on TSLA right up until Elon's afternoon tweets, then TSLA ignored the broader markets and climbed steeply. The guidelines of TSLA being influenced by the broader markets when there's no news but disregarding the broader markets when responding to important news played out well today because we had a chance to see both instances in the same day.

Once again, today was a reminder that if you play a dip right you can win, but if you sell too late or buy back in too late, the game can be costly.

Conditions:
* Dow down 139 (0.67%)
* NASDAQ down 31 (0.53%)
* TSLA 304.00, up 7.16 (2.41%)
* TSLA volume M shares 9.1M shares
* Oil 53.03, down 0.06 (0.15%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: Yesterday: 1% and an average net of about 100,000 shares drawdown per day recently
* News: Elon tweeted that semi-truck will be revealed in September, Pickup truck is 18-24 months away, and Model 3 reveal is in July

 

[Papafox]

The porridge was a little hot for the taste of TSLA traders today and although the broader markets did well, TSLA lost ground. Adding to the difficulties is the upcoming round of FANG stocks reporting their earnings, which is detracting eyes from TSLA.

Notice the 178,000 shares traded at 1:27pm. The trading was mostly in response to buying, but the stock price changed little. Similarly, at 1:52pm, 68,000 shares traded, mostly from sell-pushing (because of declining stock price, and the SP once again showed amazing resilience.

On the technical chart, we're in day 5 following hitting a new high and defining a peak in the mountain. Looking at the previous peak, the SP started down pretty quickly after day 5, but I don't think we will see this type of descent for 2 reasons: 1) TSLA proved it could break free of the 180-280 trading range (and did), and 2) the Q1 ER is little more than two weeks away and holds the possibility of being a good one. Within a week we should see some positioning for the ER. I assume many traders are holding off at the moment, due to macro concerns, but when the SP starts climbing again, many buyers will join in. All the same, tomorrow could be a test of the stock price.

So far, with Fidelity showing a significant number of shorts drawing down shares these past few trading days, TSLA has been resilient to the selling pressure and has held 300, for the most part. We've also seen small quantities of covering mixed in with the short selling the past few days, giving some indication that some shorts are getting a bit nervous.

Finally, Elon Musk continues to let good news out of the bag, slowly, via Twitter. Yesterday he announced a software upgrade for certain Tesla batteries from 60kwh to 75kwh for $2000. Today he suggested that older 60kwh Teslas might be able to get a hardware upgrade to 75kwh power for a mere 2K. Such a move not only shows confidence in the ability to sell future Teslas, it also is a huge benefit to owners of older 60kwh Teslas, who will see the value and the utility of their vehicles jump up. Where else can you find a car company so willing to enhance the appeal of your older vehicle?

Conditions:
* Dow up 184 (0.90%)
* NASDAQ up 52 (0.89%)
* TSLA do 301.44, down 2.56 (0.84%)
* TSLA volume 4.0M shares
* Oil 52.69, up 0.04 (0.08%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: 225,000 shares net drawdown, 1.00% interest

 

[Papafox]

Elon just tweeted to correct a confusing comment. The software upgrade from 60 to 75 for $2K remains, but the hardware upgrade for a 2013 Model S 60 to a 75 is not what he meant. I had no idea how he could pull off such a hardware upgrade for 2K and now that brief mystery is solved.

In other news, the after-market trading barometer dropped today, signalling possible rain tomorrow.

 

[Papafox]

Even more so than yesterday, TSLA traded within a rather narrow range today, spending most of the day ascending from 299 to reclaim 300. The day began overcast with some showers, with pre-market trading dipping into the 298s, as predicted by our after-hours barometer yesterday. At 10:17am, 87,000 shares traded hands in one minute and yet the price barely budged. Someone is surely tweaking the bots to keep TSLA from running away at this point. The shorts aren't drawing down enough shares today to make this much of a difference in dampening out volatility. Market makers make more sense in stabilizing TSLA yesterday and today, but why? Nonetheless, a slow but steady progression upward took place and TSLA closed above 300. TSLA was flirting with turning green late in the day when strategically-timed selling brought the stock price lower. Please note that the day's high was reached at 3:59 pm, one minute before closing. Also notice that instead of the 200,000+ Fidelity short shares drawn down yesterday, today we saw only a trickle at that brokerage.

Today's trading is important because the 2nd week after topping out at a new high is critical. This is the week when the story takes shape: one of a small decline followed by larger declines (the short-seller's version), or one of a break upward (long-buyer's version) in which TSLA recovers lost ground in preparation for the May 3 ER. Unless there's bad news for TSLA, I don't see how the shorts are going to win this tug-of-war because the approach of an anticipated ER in 2 weeks means that time is working in favor of the longs at this point, and moreso next week than this week. Also notice that TSLA trading yesterday and today largely ignored macros (big up day yesterday, moderate down day today).

Conditions:
* Dow down 114 (0.55%)
* NASDAQ down 7 (0.12%)
* TSLA 300.25, down 1.19 (0.39%)
* TSLA volume 3.0M shares
* Oil 52.41, down 0.24 (0.46%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: 21,000 shares drawdown, 1.00% interest

 

[Navin]

There is so much juice (theta) in the weekly options that it makes sense to keep prices flat. House makes money selling both puts and calls.

 

[neroden]

There is so much juice (theta) in the weekly options that it makes sense to keep prices flat. House makes money selling both puts and calls.

Yeah, I tried to check max pain but it's not giving accurate information today.

 

[austinEV]

Yeah, I tried to check max pain but it's not giving accurate information today.

Looks like 292 to me.

 

[zdriver]

Looks like 292 to me.

Look at open interest instead - that points to 300 being more likely.

 

[Papafox]

Today TSLA rallied on a day with mixed MACROs (porridge not too hot and not too cold). Much of the climb came in the first hour, with a typical mid-day slump and a late afternoon second wind.

Looking at the technical chart, you can see what a pivotal day today was shaking out to be. In the previous peak at 187.50, TSLA consolidated for 5 trading days and then dropped considerably. Today was the sixth day after a downward consolidation, following TSLA's 313+ ATH. We had clues that the stock was not going to go down because we saw some very large buying spees taking place within a minute's time on Monday and Tuesday, and TSLA hardly responded, suggesting some bots had been trained for "valium mode" to keep TSLA from running too far. I accept Navin's explanation that marketmakers have much to gain from such a high theta week if they can keep TSLA from running too far one way or the other, and it looks like once market forces and shorts had depressed the stock price to 300ish, the MMs were happy and trying to keep us there. Lo and behold, investors grew hungry for shares this morning and TSLA popped above 305. I think the plan now is to hold 305 until week's end, but there's no guarantee that's possible if we see other mornings as bullish as this morning. Ideally, I think the market makers showed they'd prefer TSLA at around 300 at week's end, and if bad news or bad MACROs allow, that's where we'll head. Otherwise we could climb higher this week and the market makers could lose this round. It all depends upon how enthusiastic the buying turns out to be.

The good news is that on the 6th trading day after hitting a new high (and completing the consolidation), TSLA moved nicely higher, which suggests there's room to run up further. The position of the upper bb also suggests TSLA is cleared to climb higher by a considerable amount if investor enthusiasm warrants.

Conditions:
* Dow down 119 (0.58%)
* NASDAQ up 14 (0.23%)
* TSLA 305.52, up 5.27 (1.76%)
* TSLA volume 3.7M shares
* Oil 50.44, down 1.97 (3.76%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: NA

 

[Papafox]

The games continue today as investors pushed TSLA higher in the morning hours, only to see a voluntary recall of 53,000 vehicles because of a potentially bad gear in the parking brake system pull the stock price down after 1 pm. As Electrek.co and others reported, this recall is being paid for by the third party supplier and will likely have no impact on Tesla financials. As one would expect, TSLA started recovering, but at about 2pm another wave of selling hit and brought the SP down to about 302. Notice the rather prominent spikes down, followed by immediate near-recoveries? Normally, I would expect these type of dips to be the work of short-sellers, but data suggests they are not drawing down enough shares to be the culprits. The more likely source of selling would be market makers trying to use this dip as a way of closing closer to 300 on Friday. If that happens, I wouldn't be surprised to see a nice jump up on Monday.

Conditions:
* Dow up 174 (0.85%)
* NASDAQ up 54 (0.92%)
* TSLA 302.51, down 3.01 (0.99%)
* TSLA volume 5.9M shares
* Oil 50.62, down 0.23 (0.45%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: 27,000 shares drawdown, 1.00% interest
* News: Voluntary recall of a parking brake gear that will be paid for by 3rd party and should not affect Tesla financials

 

[Papafox]

For the week, TSLA closed up 1.60 from the Thursday close of 304 last week. Although this mere 1.60 gain looks insignificant to the naked eye, I believe it's very significant. Las week TSLA consolidated downward from its 313 high. On Monday of this week, TSLA closed lower after significant selling Monday morning. Tuesday also closed lower, taking TSLA slightly below 300, but during these two days of trading we noticed some very large buying orders that resulted in minimal impact on the stock price. The meaning? Market makers were likely at work stabilizing this stock so that it didn't run away this week and mess up some nice revenues with options that expired today. Come Wednesday, TSLA ran up $7 and demonstrated that, with the consolidation done, it was ready to run up again. It would have run up on Thursday too except for a dip on unconsequential news that was exploited by the negative news channels. Today, TSLA completed the statement that this elevator will be going up in the near future.

With such positive momentum going into close today, I'd expect positive trading on Monday unless significant news intervenes.
Conditions:
* Dow down 31 (0.15%)
* NASDAQ down 6 (0.11%)
* TSLA 305.60, up 3.09 (1.02.%)
* TSLA volume 4.4M shares
* Oil unable to complete today, jumping on a plane!
* Morning's Fidelity short share drawdown or (covering) and interest rate: 1.00% interest