Ulmo
Active Member
Well, I bought a very tiny amount during the last ten minutes of market, since I recognized the pattern, and will offload that tiny amount during the morning rise Monday or whenever I'm green for that bit.
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Papafox's Daily TSLA Trading Charts
- Thread starter Papafox
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- elon is an ass TSLA
Longs are learning to play the mandatory morning dip to their advantage, and that is why we so often see a rise following the dip. Sometimes the rise turns into a small rally and that run-up can spell trouble for the shorts, so now we see what appears to be damage control after a mandatory morning dip reversal, which often takes the shape of a game of "bop-the-mole". Make no mistake, there's lots of money at stake as to whether TSLA can be pushed down prior to its next big rally, and so the shorts are willing to commit resources to gaming TSLA. It becomes a chess-game of sorts because as longs learn to take advantage of the manipulations, shorts need to keep tweeking the strategies. We did see all three regular short strategies employed on Friday, though:
* mandatory morning dip
* capping (game of bop-the-mole)
* descent into the usually low-volume afternoon close
Take a look back through recent trading days, and you hardly ever find a significant up day for TSLA if the stock isn't green and rising by 10:30 am. I think for this reason shorts put in an effort to keep TSLA reined-in until the afternoon because by that time traders have lost their excitement about the day being a good one for TSLA and turned their attention elsewhere. TSLA can still go quite negative in the afternoons, but you just don't see big swings to the positive unless there's major news released.
Working in favor of the shorts is low-volume trading of summer without significant short-term news. Manipulations work best with low volume because they're more affordable
Working against shorts is a lack of underlying dread in longs. If Q2 had been a bad ER (which implies Q3 could also be a bad quarter), Tesla's cash situation looked marginal, or Model 3 looked sketchy in terms of appeal to buyers, dread could be there, but none of these situations transpired. Instead, there's underlying enthusiasm for Model 3 and its ramp-up, which explains the consistent recoveries from the mandatory morning dips. Unless the macros get really bad or there's bad news of significance from Tesla, the shorts aren't going to create the kind of panic-selling we've seen at other times. The low volumes suggest that longs just aren't selling these days in great numbers.
* mandatory morning dip
* capping (game of bop-the-mole)
* descent into the usually low-volume afternoon close
Take a look back through recent trading days, and you hardly ever find a significant up day for TSLA if the stock isn't green and rising by 10:30 am. I think for this reason shorts put in an effort to keep TSLA reined-in until the afternoon because by that time traders have lost their excitement about the day being a good one for TSLA and turned their attention elsewhere. TSLA can still go quite negative in the afternoons, but you just don't see big swings to the positive unless there's major news released.
Working in favor of the shorts is low-volume trading of summer without significant short-term news. Manipulations work best with low volume because they're more affordable
Working against shorts is a lack of underlying dread in longs. If Q2 had been a bad ER (which implies Q3 could also be a bad quarter), Tesla's cash situation looked marginal, or Model 3 looked sketchy in terms of appeal to buyers, dread could be there, but none of these situations transpired. Instead, there's underlying enthusiasm for Model 3 and its ramp-up, which explains the consistent recoveries from the mandatory morning dips. Unless the macros get really bad or there's bad news of significance from Tesla, the shorts aren't going to create the kind of panic-selling we've seen at other times. The low volumes suggest that longs just aren't selling these days in great numbers.
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bdy0627
Active Member
Great analysis. I think this is spot on. I can tell you from my perspective, when TSLA has several down days with one being a bigger 2-3% drop with no bounce following it, I begin to consider adjusting my trading allocation in preparation for a further drop to the lower end of the range. I think this is very effective psychologically for shorts to implement in an effort to get the ball rolling downhill. I'm sure there are many others who function as "weak longs" with their trading funds, not wanting to lose profits or to even lose a substantial amount of money if the momentum really shifts downward. I don't tend to worry about TSLA when it is just moving up and down moderately. It's the large daily drop followed by another down day or a "meh" day that grabs my interest. Problem is, I don't know how to decipher whether it is manipulative or not, and I'm not sure that it even matters. Once it looks like the short term trend is changing down, I want to consider reducing short term leverage that was used strategically for a short term rise. This may also apply to a temporary increase in LEAPs or addition of some OTM LEAPs based upon expectation of a rise over several weeks. When that bounce after a big drop doesn't occur, suggesting more selling pressure than buyers, I get concerned in the short term. I'm actually finding out time and again that I simply can't predict short term moves even though at times I think I can.
apharris
Member
“After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It was always my sitting."
Those are the words, and wisdom, of Jesse Livermore, probably the greatest American stock trader...ever, a man who made his fortune in the markets of the early 20th century.
What does this quote have to do with the TSLA Short-Term Trader?
There are two times we sit: First, when we are on the right side of the trend and sit tight in our position while the trend works like an out-of-control ATM in our accounts. The second time we sit is when there is no low risk high reward trade to take.
The system is currently in transition mode, i.e., sitting mode. Having been stopped out of our latest trade with a small profit, we are awaiting a fresh signal.
So like in anticipation of the newest episode of Game of Thrones, we wait.
Those are the words, and wisdom, of Jesse Livermore, probably the greatest American stock trader...ever, a man who made his fortune in the markets of the early 20th century.
What does this quote have to do with the TSLA Short-Term Trader?
There are two times we sit: First, when we are on the right side of the trend and sit tight in our position while the trend works like an out-of-control ATM in our accounts. The second time we sit is when there is no low risk high reward trade to take.
The system is currently in transition mode, i.e., sitting mode. Having been stopped out of our latest trade with a small profit, we are awaiting a fresh signal.
So like in anticipation of the newest episode of Game of Thrones, we wait.
Attachments
Today a significant sell-off of TSLA continued from last week. The extent of today's drop is a mystery to me because the broader markets were mixed and there was no Tesla news of significance that could justify the drop. I suppose concerns about Tesla's latest bond issue trading below par is considered a negative by some on Wall Street, but as one forum member said, the lower price may be more a statement about the bond market in general than in concerns for Tesla, specifically.
The big question is: where's the bottom?
* Option sniper suggests that TSLA may go as low as 334 before recovering. If we see a recovery tomorrow, his estimate was pretty good
* Looking at the technical chart below, you can see that of the past three days of red, today's close near the middle of the daily range is a big improvement over the previous two days, where the stock closed near the bottom of the daily range. A nice recovery leading into the close is a positive sign for the next day's trading
* I believe that TSLA has been falling primarily due to negative macros but also because of expanded participation by shorts in minimizing the climbs in good days and maximizing the drops in red days. Today's decline could, in large part, be simple momentum downward where long investors are waiting on the sidelines for someone else to catch the falling knives and they will jump in once the uptrend has been reestablished.
What do I expect for tomorrow? Nearly every green day for TSLA sees the stock green and climbing by 10:30am. For this reason, if macros are positive tomorrow I would expect the shorts to try to stage a mandatory morning dip. If the dip fizzles, or if it rebounds robustly, then the recovery well into the green could begin. Fundamentally, I see no reason for serious concern about Tesla. The Model 3 is highly praised by those who have driven it, the backorders are half a million strong, Musk is talking about a relatively quick transition into positive gross margins for Model 3, and after the $1.8 billion bond sale there's plenty of money in the bank to see the Model 3 ramp-up through until the car is generating loads of positive cash flow. We're told that Model S and X sales are doing well and the solar roofs are sold out for the foreseeable future. Production ramp-up, not demand for the products of Tesla, is where attention needs to be.
Regarding macros, consider:
* North Korea fears have receded. That situation can change rapidly, but for now people are relaxing because the leader of North Korea has backed away from strong rhetoric lately
* Terrorist events such as the one in Barcelona have a short shelf-life for affecting the stock market.
* Trump appears to be acting in a less-inflammatory fashion now that right-winger Steve Bannon has left the White House team. Although the official version of Bannon's departure is that Trump and Bannon see mostly eye-to-eye, the reality is that on issues that can kindle claims by the left of bigotry, prejudice, etc., Trump has been speaking more carefully. His comments following the Boston protests were more centrist and much more compatible with calming the populous than his comments after the Virginia events. Again, I think Bannon's departure is a reasonable explanation for some of the changes we see.
* Some well-known traders are suggesting "buy the dip"
Despite a large drop in the SP of TSLA today, take a look at the upper bollinger band. It is remaining in the mid 370s and provides lots of headroom for a run upwards when this stock turns around.
Conditions:
* Dow up 29 (0.13%)
* NASDAQ down 3 (0.05%)
* TSLA 337.86, down 9.60 (2.76%)
* TSLA volume 6.5M shares
* Oil 47.54, up 0.17 (0.36%)
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bdy0627
Active Member
My read is he/she is sitting with cash on the sidelines waiting to identify a new trend (upward, I hope).
Today was a good trading day for TSLA which reaffirmed our interpretation of yesterday's trading being a setup for a positive day to follow.. Although the stock only gained a bit above $3, it was an important day for defining a reversal in the downtrend that picked up momentum last Thursday. The shorts were, of course, working the stock, first capping, then performing a mandatory morning dip (which was later than normal at about 10:30am), and finally selling in such a fashion as to set up a not-so-slow decline into closing. Unfortunately for the shorts, the decline into close turned into a rally and TSLA closed strongly today.
Working against TSLA today was a NASDAQ that was a little too hot. Some money likely went chasing stocks which rise more reliably with the broader market. A better environment would be one in which the broader markets are up slightly for the day. Also working against TSLA today was the relatively light volume of 4.3M shares.
I attach an image which shows lines at 342, 341, and 340 so that you can see the various capping exercises. The 342 caps held but the lower two were defeated by longs. Any time you see what looks like plateaus you are likely looking at capping.
Has the downtrend been defeated? The jury is still out because macros can reignite it, but if the macros behave I wouldn't be surprised to see TSLA regaining some lost territory. Strong climbs into closing suggest buyers (longs and shorts) are trying to jump aboard the train before it leaves the station.
Conditions:
* Dow up 196 (0.90%)
* NASDAQ up 84 (1.36%)
* TSLA 341.35, up 3.49 (1.03%)
* TSLA volume 4.3M shares
* Oil 47.66, down 0.17 (0.36%)
Today was a significantly positive day for TSLA in many regards. It expanded upon the small gains of yesterday, TSLA rose above the 50 day moving average, the upper bb started to climb again, and as with yesterday there was a nice climb into closing, which suggests buyers (longs and shorts) remain nervous about missing the train as it leaves the station. In today's case, they had to run fast because that train was already tooting its whistle and building up a head of steam. Look too at the various manipulations that failed today. The mandatory morning dip was anemic, various attempts at capping (345 until a bit after 11am, 347.50 until 2:00pm, and 350 until about 3:30pm) all failed and resulted in the manipulators losing money. Also significant was that TSLA (along with other tech stocks such as NVIDA (up 2%), Apple, and Intel, all closed in the green today even though the NASDAQ and Dow were red. Translation: we're seeing a bit of a shift back into tech stocks today.
Looks like OptionSniper just about nailed it with his estimate of a low this week around 334 and a nice climb ahead for TSLA, based upon the monthly technical chart. A few days ago I joked about TT7 substituting for OptionSniper because OptionSniper said basically the same thing that TrendTrader007 said a couple days earlier (plus adding an estimate of this week's low). For this reason, TrendTrader007 deserves recognition for delivering the scoop. Now it's time to see that cup and handle play out.
Looking at the technical chart, you can see the significant climb above the 50 dma (blue line) and you can see the upper bollinger band starting to climb again with nearly 20 points of headroom remaining at the moment. This is a nice setup for further appreciation. I'm happy that we caught wind of this reversal two days before the market figured it out.
Conditions:
* Dow down 88 (0.40%)
* NASDAQ down 19 (0.30%)
* TSLA 352.77, up 11.42 (3.35%)
* TSLA volume 4.9M shares
* Oil 48.37, up 0.54 (1.13%)
Today the broader markets were slightly down, much like yesterday, but an effective mandatory morning dip shortly after the exuberant opening discouraged longs and shorts alike from thinking today would be a big green day. Nonetheless, TSLA managed to cross 356 twice, but the game of "bop-the-mole" where shorts try to sink TSLA back into the red prevented those climbs from sticking. I suspect the shorts aimed to see TSLA close in the red today and they almost made it with a last-minute push right before close, but buyers were also present and TSLA stayed ever so slightly green. We don't have long before the financial community returns from vacation, volume goes up, and manipulations become less effective.
While the enthusiastic run-up from yesterday was checked today, the bigger picture is that this week TSLA reversed the descent and reclaimed a fair amount of lost ground. Time is working in favor of longs now because when Model 3 ramp-up is reported to be moving along well, the bulls will get their second wind and start bidding TSLA up again. It really is hard to understand what the shorts are hanging in there for. Are they expecting the Model 3 ramp to be like Model X's (not likely)? Are they waiting for macro turmoil (more possible but not enough to bet a fortune on)? My guess is that most are going to have to take that ride to well above 400 to appreciate the gravity of the situation. In the meantime, a stock price of 350 or above is a healthy place for TSLA to be while it awaits the next catalyst that will take it higher. There's always enthusiastic Monday morning amateur hour to really get the blood flowing in worried shorts, and it'll be fun to see what next Monday has in store.
Conditions:
* Dow own 29 (0.13%)
* NASDAQ down 7 (0.11%)
* TSLA 352.93, up 0.16 (0.05%)
* TSLA volume 4.6M shares
* Oil 47.43, down 0.98 (2.02%)
On Friday, TSLA closed down on mixed macros, which is normally a good trading environment for the stock. Taking a look at the daily chart, instead of seeing the high/low jumps of the stock price that is as disconcerting as watching a ping-pong game, today's trading didn't show the sharp moves, which suggests it was more likely based upon actual repositioning of assets, rather than manipulations. Nonetheless, volume was low on Friday and with a close very nearly at the 347.50 max pain numbers, market makers could have had some impact upon the stock's closing numbers, particularly with the late afternoon descent into close.
For the week, TSLA closed at 348.05, up 0.59 from last Friday's 347.46. Much of this week was used to erase Monday's losses. Friday's movement worked to consolidate the stock price somewhere between the highs in the 370s and briefly the 380s and a recent low in the 330s.
To put things into perspective, as recently as last November, TSLA was trading not much above 180. We now see traders becoming comfortable with a number that is nearly twice that high. This period of consolidation is taking place while the Model 3 ramp-up is still an unknown. Once large quantities of Model 3s start moving off the assembly line todays prices will be an excellent base for moving to the next higher level.
This week, TSLA bull Ben Kallo raised his price target from 368 to 411. What's interesting is that 368 has become a meh number now, and it is necessary to start pricing in the 400s for those who are optimistic about this stock. We've come a long way this year and have a long way to go once the next catalysts ignite the rocket fuel.With an extra $1.8 billion in the bank, running out of cash is not a threat in the coming year, and once cash flow turns positive with Model 3 producing decent gross margins, the short thesis is toast.
I am not a trained technical trader, but looking at this chart you can see why traders such as OptionSniper and TrendTrader007 are getting excited. Look at the lows from each of the three big dips we've seen since touching the 380s. They are 303.xx, 311.xx, and 331.xx. In other words, the lows keep getting higher. I suppose you can also look at the peaks and say they have been getting lower since the 380s, but this consolidation is likely very healthy at this level and we can expect a break up or down with the semi-truck event coming and hopefully good news about the Model 3 ramp up coming too. Unless macros tank, I suspect we'll be heading up to a new ATH but the short-term is always a guessing game.
Conditions:
* Dow up 30 (0.14%)
* NASDAQ down 6 (0.09%)
* TSLA 348.05, down 4.88 (1.38%)
* TSLA volume 3.5M shares
* Oil 47.87, up 0.44 (0.93%)
Today the NASDAQ took a dip (from in the green to less in the green) and TSLA followed, but in exaggerated fashion, perhaps because of either bots or shorts jumping on. The rest of the day was a slow recovery from that dip. Again, we're trading with low volume in the end of summer while shorts have an incentive to manipulate, and so TSLA's price is being influenced by these subtle influences.
In after-hours trading, TSLA dipped most likely on news of the North Korean missile launched over Japan. The leader of North Korea is likely trying to save face by retaining his threatening posture while not pushing so hard as to bring a military response.
Conditions:
* Dow down 5 (0.02%)
* NASDAQ up 17 (0.28%)
* TSLA 345.66, down 2.39 (0.69%)
* TSLA volume 3.8M shares
* Oil 46.8, up 0.23 (0.49%)
Today the broader markets and TSLA opened lower on fears of North Korea's recent missile launch, with TSLA trading as much as 2% lower in European trader overnight. Fortunately, the broader markets spent the day recovering into the green and TSLA followed, but once TSLA reached 348 it leveled off in apparent capping whereas the broader markets continued to climb slowly (although the NASDAQ did a small dip prior to close). Again, we see low-volume manipulations that affect the SP during the final week of summer vacation.The climb brings TSLA that much closer to the 350 consolidation point.
Conditions:
* Dow up 56 (0.26%)
* NASDAQ up 79 (0.30%)
* TSLA 347.36, up 1.70 (0.49%)
* TSLA volume 4.1M shares
* Oil 46.32, own 0.25 (0.54%)
Some of you might have noticed my post last night in the market action thread where I suggested that today might be a good day for TSLA. Here's why I said so. Yesterday, TSLA came back strong from the North Korea morning gap-down dip On the way up it stopped at 348 and traded horizontally from there. Why? For some reason, shorts want to keep TSLA from running above 348.What I saw in after-hours trading was that buyers were bidding TSLA back up to the 348 mark, up more than 60 cents after close. I started thinking about the pressure to hold TSLA at 348 and realized that if macros allowed, we could see enough buying pressure to break through 348 today. Thus, I posted. Clearly there was demand to bid the stock price higher.
Lo and behold, the day begins strong, there's an immediate but short-lived mandatory morning dip (a great buying opportunity I thought) and after breaking 351 the stock was being capped to keep it below 350 and in a moment of market weakness, TSLA was pushed down to 348, where it was being capped again. Unfortunately for the shorts, the pressure to bid the SP up today was too great and they lost control of the 348 cap. They regrouped and capped at 352 but lost control of that cap too. It was wonderful to watch the scenario play out. My biggest point is that when you see extensive efforts to cap a stock at a particular price point and the longs aren't giving up after a couple hours, the cappers (shorts) are likely starting to run low on ammo. Once the shorts lose the fight on capping a stock, there's a serious chance it will run higher because the pressure that broke the cap is also pressure that will push the SP higher.
Normally, a big up day for the broader markets is not the best trading environment for TSLA, but when TSLA is chomping at the bit to run higher, it's not a bad environment, either. In particular, when the NASDAQ has a slow but steady run uphill like we saw today, that keeps pressure on the stock price. Then, about 12:30pm, the DOW started a nice run uphill and the cap at 348 collapsed. So, I think it is fair to say that macros helped TSLA break the 348 cap today. Interestingly, the broader markets weakened a bit in the final half hour but TSLA by that time had taken on a life of its own.
Conditions:
* Dow up 27 (0.12%)
* NASDAQ up 66 (1.05%)
* TSLA 353.18, up 5.82 (1.68%)
* TSLA volume 3.4M shares
* Oil 45.97, down 0.47 (1.01%)
ValueAnalyst
Closed
I'm asking myself that same question. Yesterday I looked back at the closing price on July 31 to see where we began August and we were in the 320s, so clearly TSLA is still going to look good on a monthly basis if it ends the month at 348. Maybe one of our technical traders can shed some light on the number. Perhaps it has to do with the 50 day moving average, which was 348 not many trading sessions ago but has since dropped to a lower number.
What matters to me, though, is that if constant capping can't keep the stock price from returning to the same number, day after day (not getting defeated by the capping), and we're seeing movement upward in the after-market trading, I see a cap that is about to fail (macros allowing) and potential for a nicely green day for TSLA.
I've seen folks use the 10 day moving average as a short term indicator to determine whether the SP is in a bull cycle or bear cycle. Above is bull, below is bear. Today's 10 day MA is 347.85.
Yesterday should be considered a golden cross, where the 5MA crossed above the 10MA. So capping at 348 could be related to trying to prevent the SP from closing too far above the 10MA, and blunting the 5MA. If you look at the 5MA vs 10MA, there is growing divergence today due to the strong close. If the SP could have been capped around 348, then the 5MA could have flattened/turned down and threatened to cross back down the 10MA. As it is, there is a strong positive divergence. Currently the SP is pretty much at the 20MA.
Interesting note, the Bollinger bands have really squeezed down today, which Bollinger implies that some type of break out maybe imminent. My WAG (or hope) is that we will close at around 363 tomorrow. This would push the SP above the upper bands on the monthly chart, and position TSLA back into the above the upper band continuation territory that Bollinger talked about.
The current monthly candle formation is very bullish, a Piercing pattern. Unless the bears can drive the SP to close below 346.855 tomorrow, this pattern should hold into the last day of the month. So even if the SP doesn't close above the upper bands, it still implies next month should close higher.
Concur 100%. Took advantage of Kim Jung and bought a full position in leaps. This is the most bullish I feel this year. Good luck going to be a fun ride.
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