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Papafox's Daily TSLA Trading Charts
- Thread starter Papafox
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Today was a volatile trading day for TSLA with low volume in a neutral to negative macro environment. Normally, short sellers can put such a day to good advantage, but the ability of TSLA to consistently spring back from dips below 300 must be frustrating to the shorts.
The biggest story is actually the chart above of the most recent 7 trading days. For the first of those 5 days, we had a wedge form with about 306 as the top and ever-rising bottom as TSLA approached a very narrow daily trading range. The expectation was that the stock would break up or down, with up more likely since the lows were ever increasing. Day before yesterday, it looked like the shorts tried to force TSLA down to create an artificial break downward. It didn't work because longs bid TSLA right back up above 300 and TSLA closed in the typical range. Today, TSLA really did break to the upside in the morning, but I think shorts sold enough to pull it down and prevent a true break upward. Shorts were able to pull the 10am rally down (if that is what happened) because there's no real news of a Model 3 ramp up yet, and longs lack the conviction that TSLA is ready to roar upward. And so, we continue in the waiting game for Model 3 to ramp. Tick, tick.
Looking at the www.shortvolume.com chart, you can see that leading up to the 3Q ER, shorts were routinely trading 60% of the shares of TSLA but after the ER (the huge volume day was first trading day after), both volume and short percentage of trading have been decreasing. One assumption could be that shorts are reducing their pressure on TSLA, at least for the moment, as the strong support below 300 continues to thwart their efforts.
For the week, TSLA closed at 302.99, down 3.10 from last Friday's 306.09. Considering the extent of recent weekly losses, this performance can be considered a relief of sorts. We saw significant efforts by shorts this week to push TSLA below 300 and hold it there, but any time the stock descended into the 290s, buyers materialized and pushed it back above 300. Overall, I am satisfied with TSLA's performance this week, given the lack of news. Have a good weekend.
Conditions:
* Dow down 40 (0.17%)
* NASDAQ up 1(0.01%)
* TSLA 302.99 up 0.00 (0.00%)
* TSLA volume 4.6M shares
* Oil 56.74, down 0.43 (0.75%)
$300's a major psychological number, it's close to several technical numbers, and it's not far off from several simplistic valuation models. I would be deeply unsurprised if a large number of large investors have decided to buy in whenever the stock drops below or around $300. In fact I set up the strike prices for my put sales several months ago based largely on this assumption, which seems to be right...
I'm appallingly terrible at making such guesses. I used to say I was no good at all at short-term, but I seem to be getting a little better. I still suck at this, so I wouldn't dare hazard a guess for New Year's. My target date is still 2019... and I don't exactly have a target price, just "significantly higher than $300".
I suspect $300 will act as support... but it might dip below it and go back up again later. $180 was solid support for years but there were several dips below it, so I'm half-expecting range-bound trading similar to the past few years, though at a higher level. Until it's clear to Wall Street that lots of model 3s are getting delivered and that Tesla is in fact making money off them.
erthquake
Active Member
If you truly will not need the money for 10 years then it really won't matter if you buy at $280, $300 or $320.
erthquake
Active Member
This is a topic better suited for the General Discussion thread, but some here think the SP could drop 30 points or even more sometime before the Q4 earnings report in February. If Tesla reports low Model 3 Q4 deliveries during the first week of January with little indication that the ramp is progressing, that could indeed push the price lower. If, however, evidence suggests they are or will be producing 2-3k M3 per week by the end of December, buyers could try to jump in on the stock.
If your time horizon is 10 years and you believe Ron Baron's outlook on Tesla, then buying now or next quarter won't matter much.
You could buy half of your stock now, see what happens, and buy the rest at a later date.
bdy0627
Active Member
That's what I would suggest here too. Break your purchase up into 2 or 3 blocks and buy 1 block now.
Last week, bears and shorts tested TSLA to see if it could be driven below 300 and held there until the close. It could not. Although breaks up or down were tested and defeated, the value of last week was showing that TSLA could hold 300, even with the current slow output of Model 3.
Come today, we started with a small mandatory morning dip, followed by the pretty-typical Monday morning amateur hour run-up and retreat, but then the stock caught its second wind, started up, and the climb was accelerated by a tweet from Elon saying that the semi-truck event "will blow your mind." With those words, TSLA resumed its climb and tacked on more than 12 points prior to close. Perhaps the event this weekend that allowed Wall Street analysts to drive a Model 3 helped. In any event, the combination of factors, plus a good macro environment (slight climb) led to a strong performance for TSLA.
Looking at the technical chart, you can see a clear breakout above the wedge-shaped trading pattern that existed until Wednesday of last week (followed by the failed push down and run up). Next stop? A price of 321 would allow TSLA to retake its 200 day moving average and would place the stock above the close prior to the 3Q ER. No doubt we can expect a battle to retake the 200 DMA. Let's hope the semi-truck event and excitement leading up to it does the job.
Conditions:
* Dow up 17 (0.07%)
* NASDAQ up 7 (0.10%)
* TSLA 315.40, up 12.41 (4.1%)
* TSLA volume 7.6M shares
* Oil 56.70, down 0.04 (0.07%)
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Thanks for the insights as usual Papa! I was mulling this same thought this weekend, actually considering what if these investors agree with Sacconaghi's review opining about the dismal fit and finish of Model 3? Judging by today's SP reaction, they must have been impressed and hopefully removed doubt about the 3's quality. Looking forward to the ramp of both SP and the 3!
Looking at today's shortvolume.com data, the relatively low 46% of trading today by shorts suggests that the majority of the buying today was probably by longs. The fun begins as the shorts start to bail.
Now comes the time for guessing what TSLA will do in the short term and when it will run uphill to reclaim the 380s and a new ATH. The sensible answer is when Tesla proves that the bottlenecks with Model 3 are removed and production is ramping on or ahead of schedule. The correct answer might be something different, however, as we've seen 380 breached twice already: first when Tesla introduced Model 3 and demand went ballistic and second when initial production began. I remind you of these two false climbs because the market tries to anticipate good news and the market could do it again. This time, though, the SP has a reasonable chance of remaining elevated because the Model 3 substantial ramp-up is that much closer.
The remedy for uncertainty in when TSLA will run to the heavens again? Take a position in Tesla with stock or J19or20 leaps and ride out the short-term turbulence. When Orthosurg asked about when to buy TSLA, the answer of breaking the buying into about 3 different purchases was a good one. If a third of the stock was bought around 300, and another third was bought later today as the stock started running higher, and the third purchase takes place either when there's been a surprise dip or when the stock climbs to 320, Orthosurg would be in fine shape for the future. The point is to realize that we cannot always anticipate when this stock will head lower and when it will head higher. The solution is to take a comfortable stake in the company, ride out the short-term turbulence, and then reap the benefits in the coming years.
Just a few words about my post above ...
* We already know that the market is willing to bid TSLA above 380 when it thinks Model 3 is about to become a real success. Therefore, we know that it's reasonable to expect such a stock price once Model 3 shows that it is ramping up substantially.
* Most of us believe that Tesla will ramp Model 3 substantially, if not within December or Q1, then in Q2 of 2018.
* Last week we saw TSLA bounce back from all attempts to drag it below 300, so we can have reasonable expectations that (excluding really bad MACROs and bad news) TSLA may have bottomed out
For these reasons, stock, J19 or J20 leaps are a reasonable investment at this point.
Yes, the short term is typically unpredictable, but as long as you can weather negative short-term surprises by outlasting them, your investment should do well.
* We already know that the market is willing to bid TSLA above 380 when it thinks Model 3 is about to become a real success. Therefore, we know that it's reasonable to expect such a stock price once Model 3 shows that it is ramping up substantially.
* Most of us believe that Tesla will ramp Model 3 substantially, if not within December or Q1, then in Q2 of 2018.
* Last week we saw TSLA bounce back from all attempts to drag it below 300, so we can have reasonable expectations that (excluding really bad MACROs and bad news) TSLA may have bottomed out
For these reasons, stock, J19 or J20 leaps are a reasonable investment at this point.
Yes, the short term is typically unpredictable, but as long as you can weather negative short-term surprises by outlasting them, your investment should do well.
Whereas yesterday was a day with good macros in which TSLA could thrive (small up day for DOW and NASDAQ), today was a down day for the macros, with two rather steep dips of the NASDSQ bottoming out at about 10am and 1pm, with subsequent recoveries. To understand the relationship between the NASDAQ and TSLA today, please view the two charts below. Also notice the steep dips with immediate near recoveries throughout the morning, a classic fingerprint of short-selling manipulations.
NASDAQ chart
TSLA chart
You can see that after the NASDAQ bottomed out about 10am and it recovered, TSLA recovered slightly, but not nearly as much. Behold sticky dip #1. Then a more pronounced dip of the NASDAQ bottomed out at 1pm and the NASDAQ started rising. TSLA did not follow, though, as short-sellers capped the stock price and we saw a relatively flat trading for the rest of the day at about 308. A double sticky-dip day is a good thing for the shorts, but of course it is an artificial construct and will be neutralized when TSLA has another good day and the rise in TSLA is just that much greater to bring it to a valuation the market believes is fair for that day.
The bad news of a successful sticky dip day is that TSLA is signaling that it can be manipulated at this price point. Shorts are likely to try again, but if the SP gets down to 300 again, the aggressive buying below that number is likely to kick in again.
How do you profit from identifying a sticky dip? Since it is a manipulation that should be neutralized at a later date by the market, it can be a good time to buy the stock at a slight discount. On the other hand, if the manipulations are proving successful, there's a reasonable chance that they can be repeated the next trading day if macro conditions allow. That second approach would suggest waiting until you see a day that the manipulations are being defeated and then buying on that day. Let's see if the shorts can pull off this manipulation tomorrow.
Conditions:
* Dow down 30 (0.13%)
* NASDAQ down 20 (0.29%)
* TSLA 308.70, down 6.70 (2.12%)
* TSLA volume 5.6M shares
* Oil 55.29, down 1.47 (2.59%)
Today TSLA began the trading day with an impressive cliff dive below 302. Alas, the NASDAQ began recovering from its early morning sell-off and the market said "nope" to any plans to keep TSLA priced this close to 300 and quickly bid TSLA back above 308. Once TSLA went green, a couple hours of bop-the-mole ensued as TSLA tried to go green and shorts sold as necessary to push it back into the red. Their hope was to resume a decline or even hold the red/green line disappears as the NASDAQ showed no more major dips during the day, and longs bid the stock up to close a couple points higher than it began today. Today was a down day for the macros and yet TSLA showed strength.
Ihor Dusaniwsky noted today that shorts are nearly a million shares deeper into TSLA since the beginning of the 3rd quarter. Prior to the 3Q ER, TSLA saw short traders doing more than 60% of the trading, but more recently that percentage has dropped to the 40s, which suggests lower numbers of shorts selling into new positions. Still, it looks like lots of fun ahead when Model 3 starts seriously ramping up.
Conditions:
* Dow down 138 (0.59%)
* NASDAQ down 32 (0.3%)
* TSLA 311.30, up 2.60 (0.84%)
* TSLA volume 6.0M shares
* Oil 55.37, up 0.04 (0.07%)
Today, the House of Representatives passed their version of the tax bill, which sent the macros higher. Meanwhile, TSLA was trading today primarily on expectations of tonight's semi-truck reveal. Longs and weak shorts likely bought in the afternoon, which ran the price higher on anticipation of the event, and then traders sold most of the gains out of the stock during the later afternoon as they assumed tonight's event will be like many others in which the lead-up to the event is positive for the stock but the event leads to a sell-the-news response. Nobody really knows whether tonight's reveal will lead to a run-up on Friday or a drift-down. I would say that the strength of TSLA in the 300 price range suggests that any possible drift-down would be minor.
Looking at the technical chart since the 3Q ER, you can see the wedge with the flat top, the two false breakouts, the positive breakout and the following gyrations after the positive breakout. Notice that the 200 day moving average (which proved to be significant support in the past but now might be a resistance point) is at 321.64, which is not all that much above the current price. If fortune smiles on us longs, the event tonight will create enough positive sentiment to send the stock above the 200 dma and perhaps establish a new support level. Don't hold your breath, but it would be nice.
In other news, lots of Model 3 sightings have been made this week. About 30 Model 3s were sighted at a staging area in Playa Vista, CA, and about 20 Model 3s were sighted at the Tesla delivery center near the factory.
Conditions:
* Dow up 187 (0.80%)
* NASDAQ up 87 (1.3%)
* TSLA 312.50, up 1.20 (0.39%)
* TSLA volume 5.8M shares
* Oil 55.19, down 0.14 (0.25%)
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Today the macros were down but TSLA ran as high as 327 in pre-market trading on enthusiasm created by last night's semi-truck and roadster 2 reveal. The first minute of market trading saw 362,000 shares trade hands, an amazingly high number. Both revealed vehicles look stellar, but without the details for analysts to digest the financial impact of these new additions to Tesla's vehicle programs, the stock fell as the day progressed. The high volume today (13.7 million shares) plus the rather low percentage of short trading (43%) suggests shorts were not a particularly large reason for the declines. Curt Renz theorized in the general discussion thread that the dip in the final hour of trading could likely have been due to marketmakers and hedge fund managers manipulating the stock so as to most favorably influence the Friday close of monthly options. I looked and saw that 315 was nearly even with the 320 max pain number today, and so Curt's theory may carry weight.
For the week, TSLA closed at 315.05, up 12.06 from last Friday's 302.99. This was the first green week after five red weeks, with Model 3 production issues leading the causes for those declines. Last week's shallow losses were an indication that this stock was turning around.
Looking at the technical chart, you can see that after the "wedge" and two false breakouts resolved, TSLA has been drifting higher in 5 of the past 6 sessions. We topped the 200 DMA after gapping up on the start of trading today, but will have to retake the 200, hopefully early next week.
Speaking of next week, if macros allow, I wouldn't be surprised to see a nice jump up during the amateur hour, likely followed by some degradation of that rise. There are going to be enough investors checking out the semi-event video this weekend to fuel a lively first hour of market trading, I suspect.
Enjoy your weekend.
Conditions:
* Dow down 100 (0.43%)
* NASDAQ down 10 (0.15%)
* TSLA 315.05, up 2.55 (0,.82%)
* TSLA volume 13.7M shares
* Oil 56.71, up 1.36 (2.46%)
Tales of the Black Candle
On Friday, the technical chart showed TSLA with a gain but with a significantly lower closing price when compared to opening price (a tall black candle). The two ways to interpret the big rise after the semi-truck event, followed by a not-quite-as-big retreat are: 1) investors initially overestimated the value of the event's revelations and the market corrected that afternoon or 2) the market over-corrected for the initial reaction to the semi-event and a correction to that overreaction would show up today. I suspected the answer was number two, but the market said that number one was true today. Oh well.
Sniping the Option Sniper
Today, after TSLA drifted low, Option Sniper said that TSLA "will see a strong bounce here towards 308.6-309.2." It happened. After some recovery of the SP he said, "$tsla bounce to target area. if hold here, see 310.8 possible." Enough TSLA traders follow option sniper so that the shorts got worried about this additional note of optimism, and @zdriver responded that someone posted a sell order for 110,000 shares at 310 just 3 minutes later. Although the manipulations are fewer than before the ER, they're still there. Short-term traders beware.
Positive news is that sightings of Model 3 picked up last week. Once Tesla proves that Model 3 production is ramping up to thousands of units/week, this stock will be ready to climb. In the meantime, the strong 300 support which we saw earlier has been replaced with support around 306, the top of the wedge. With each higher support level, TSLA is better positioned for a move in the right direction.
Conditions:
* Dow up 72 (0.31%)
* NASDAQ up 8 (0.12%)
* TSLA 308.74 (2.00%)
* TSLA volume 8.2M shares
* Oil 56.39 down 0.32 (0.56%)
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