Papafox's Daily TSLA Trading Charts

[dm28997]

View attachment 269792
Today was a down day for the broader markets, with a slow decline in index values as the day went on and a big dip right before closing. For the most part, TSLA followed the broader markets down today (which was no surprise with shorts taking advantage of sub 4M volume). The surprise came in the final 25 minutes of market action as the NASDAQ and DOW both did swan dives but TSLA buyers appeared with significant volume and created a nice rise until just a couple minutes before close. I guess I wasn't the only buyer looking for bargains on a low-volume Friday afternoon before a holiday. Fortunately, I grabbed a couple more calls below 311.

View attachment 269796
Today's NASDAQ trading

View attachment 269793
Ever since Nov 27, shorts have been on the warpath and trading the majority of TSLA shares every day

So, how have longs and shorts fared this year? On the last trading day of 2016, TSLA traded at 213.69. That's a rise of over 45% in the stock price this year. Hoping you all enjoyed that full rise and hoping 2018 brings us even higher returns.

How have the shorts fared in the past year? According to Ihor Dusaniwsky, they're down $3.39 Billion for the year. Being a long-term TSLA short continues to be a really bad idea. Shorts have begun some covering in the past two weeks. Let's hope it's the beginning of a trend.

There's so much misinformation out there regarding Q4 Model 3 delivery expectations that it is really difficult to predict what the market will do when delivery numbers are released on Jan 2 or Jan 3. From virtually every angle (supplier parts orders, Model 3 sightings, delivery lots filled to overflowing numbers, etc.) Model 3 production has really improved in recent weeks. Once 5,000/week production is achieved, this stock will be red hot, if not considerably before that date.

Have a happy new year!

View attachment 269804

Conditions:
* Dow down 118 (0.48%)
* NASDAQ down 47 (0.67%)
* TSLA 311.35, down 4.01 (1.27%)
* TSLA volume 3.8M shares
* Oil 60.42, up 0.58 (0.97%)

-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
I just want to thank you for posting such useful information. I have been investing in Tesla for several years and bought two Teslas with stock profits. The model 3 is coming in a week or two as my wife configured it and I will pay for it taking more profits. I don't do options much anymore but did buy some today along with stock and am ahead at the end of the day holding going into 2018. I don't look forward to doing my taxes but will need to figure some methods to shield my profits from the tax man for next year.
Happy New Year

 

[AlMc]

-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
I just want to thank you for posting such useful information. I have been investing in Tesla for several years and bought two Teslas with stock profits. The model 3 is coming in a week or two as my wife configured it and I will pay for it taking more profits. I don't do options much anymore but did buy some today along with stock and am ahead at the end of the day holding going into 2018. I don't look forward to doing my taxes but will need to figure some methods to shield my profits from the tax man for next year.
Happy New Year

Consider the Fidelity Charitable Trust. I did this for 2017 with 'profits'.

 

[Papafox]

Behold 2017's short seller percentage of TSLA trading. You can see that 35-45% is a low percentage of trading by short-sellers and 55-65% is a high percentage. TSLA has been trading in the high range since Nov 27 (chart from www.shortvolume.com).

 

[avoigt]

Sidesteps.

The longer we remain in the band the stronger the resistance and support will get.

Its likely that we see another support test.

 

[Papafox]

Today was a surprise, since the day of or day before release of important information is often a neutral or negative trading day for TSLA. Looking at the technical chart below, though, you can see that concerns about what Model 3 numbers will likely be in the Q4 deliveries message has been exploited by shorts, who have used the usual techniques to help depress TSLA from the high 340 down to the 310s in a short period. As often occurs, these type of gains by the shorts are often short-lived, and today was a day for unwinding some of those gains as sentiment turns more bullish about Tesla. The bullishness is likely related to the growing realization that 1) Elon's words about ramp rate of Model 3 in Q1 will be more important than Model 3 Q4 numbers, and 2) there's growing evidence that the bottleneck at the gigafactory has been solved (or greatly reduced). For example, just an hour ago I received a tweet by Tesla seeking additional workers for Gigafactory1. Would they be expanding aggressively if the bottlenecks were still in place?

Of course much of today's climb may not have been Tesla-specific at all. Volume was light, which opens the possibility that macros had a strong influence on TSLA today. The NASDAQ was up one and a half percent today, NVIDIA enjoyed an even bigger percentage gain than TSLA, with BABA more than doubling the gains of these two. The market is giving back some of the rebalancing of the previous two weeks. Option Sniper is predicting 334 soon for TSLA.

The most likely date and time for releasing Q4 delivery numbers and comments regarding the ramp-up of Model 3 will be after market close on Wednesday. One possibility is swings up and down as traders interpret rather disappointing Model 3 delivery numbers as a negative while other traders are interpreting words about the upcoming M3 ramp-up as a big positive. Can you say "battle of the bots?" If you are thinking of buying shares after the numbers are released, realize that volatility could be high. The trajectory of TSLA depends upon the words used by Tesla to flavor the expected Model 3 ramp. Another possibility is that longs (and shorts) are coming to recognize that TSLA will head much higher in 2018 and they're ready to buy once the dip bottoms out, which suggests the dip won't be deep at all. Finally, the Model 3 delivery numbers for 2017 will likely disappoint, and if Tesla doesn't add optimism regarding the ramp, you could see a noticeable dip. I'd be inclined to believe that dip would be short, though, and I'm pleased to have done some below-311 buying last week.

If shorts have their way, they'd like to see TSLA close down tomorrow and below the 50 day moving average, which is just slightly below TSLA's current price. Keep in mind that Wednesday's trading will be just a side-show. What counts is the market's reaction to the Q4 numbers.

Conditions:
* Dow up 105 (0.42%)
* NASDAQ up 104 (1.50%)
* TSLA 320.53, up 9.18 (2.95%)
* TSLA volume 4.3M shares
* Oil 60.43, up 0.06 (0.10%)

 

[neroden]

I'll be interested to read your analysis for today -- the trading pattern looks unusual to me.

 

[Papafox]

Today's market trading was more typical of a day before a delivery message by TSLA: somewhat volatile with both longs and shorts taking some risk off the table prior to close. I think the climbs in the morning were much a continuation of the excitement spilling over from the previous day, but much of that excitement was macro-induced on Tuesday and didn't have the power to pull TSLA up for a second day. At about 3:15 today, TSLA's dip bottomed out and someone started buying for a short period. I believe the likely buyers were shorts who were covering prior to the delivery report in order to take some profits.

Once the results of the Q4 delivery report came out, the market registered disappointment by dipping the stock another 6-7 dollars in the immediate after-hours trading. Model S and X deliveries were excellent, Model 3 deliveries were disappointing to some investors but not the informed ones, and an effective run rate of about 1,000 Model 3s a week at year's end was good. The big problem was the downward adjustment of end-of-Q1 run rate expectation from 5,000 Model 3s a week to 2,500 Model 3s a week. A slippage of the 5,000 Model 3s/week goal by 2-3 months isn't going to substantially hurt Tesla in 2018, but it's the reason for the market's dip after the news.

The bad news is that tomorrow will likely see a further dip. The other bad news is that supplier comments about Tesla needing enough parts for 5,000 Model 3s a week were untrue. The good news is that Model 3's production rate has increased quickly in December and should continue to increase. The 2,500 Model 3s/week goal looks achievable by end of March, the vehicle is getting rave reviews by new owners, and the stage is set for Model 3 to continue increasing its production rate throughout the year.

Although shorts will try to exaggerate and exploit other threats such as Tesla's cash on hand, those threats can be dealt with as we see a steady increase in Model 3 production rate. Take a deep breath, snug up the seatbelt for a few more days, and be ready to deploy dry powder (if you have it) when the market signals that this (likely short-lived) dip has bottomed out.

Overall, Tesla looks well-positioned for an excellent 2018, with lots of orders for its products (Q4 ER will reveal substantial cash coming in with roadster 2 and semi deposits), enough cash to make it possible, and bottlenecks finally being conquered in the Model 3 ramp. This dip can best be seen as a gift to long-term investors who have dry powder to deploy.

Conditions:
* Dow up 99 (0.40%)
* NASDAQ up 59 (0.84%)
* TSLA 317.25, down 3.28 (1.02%)
* TSLA volume 4.4M shares
* Oil 61.93, up 1.56 (2.58%)

 

[Papafox]

Here's another perspective on today's trading.
For months now, Tesla investors have been aware of problems with the Model 3 production ramp. The Q4 delivery report we saw today was the event that many investors feared as the quantitative assessment of those troubles. Well, we took our medicine today and it wasn't all that painful so far. In market trading and after-hours trading today, TSLA lost a tiny bit more than we longs made in Tuesday's trading. So far, it's about a wash. With TSLA trading in the 380s as recently as late September, longs know that once the ramp is going strong, we'll return to those levels and eclipse them. Since expectations for 2018 remain high, once the dip bottoms out (and that could happen tomorrow), we're ready to head higher. If you plan to do some buying, watch carefully. This stock can climb just as fast as it can dip.

 

[Papafox]

Please, step into my office, we have something important to discuss. Let's get right to the point. The TSLA shorts are soon to be toast: crispy, blackened, non-buttered, non-honeyed toast. Despite the shorts trading nearly two-thirds of today's shares, they failed to elicit any fear in longs today regarding Wednesday's Q4 delivery numbers. Consequently, TSLA recovered the vast majority of Wednesday's post-delivery-message losses. Today was damage control by the shorts and it took lots of resources with nearly 10 million shares trading hands today and an enormous percentage of trading done by the shorts.

Of course shorts tried a mandatory morning dip, but when it fizzled below 307 the stock quickly headed to the green. Behold a game of "whack the mole" that must have taken quite a lot of selling to pull off with this volume. Look at all the level trading and slow decline trading (both are forms of capping). The shorts lost control of their caps again and again and had to throw more resources at TSLA to keep the stock price from running away. They succeeded somewhat today, but how long can their efforts hold back the tsunami?

Here's the deal. A great many longs are waiting on the sidelines right now, anxious to get back into TSLA once they feel the stock has bottomed out after the Q4 delivery numbers. It is possible that with bad macros, FUD attacks, and stock downgrades by questionably-competent analysts, shorts may be able to extend their push down a few more days, but even in the event of such a micro-success, the SP becomes more attractive to longs, and when it starts heading up, as it will inevitably do soon, there is no way that shorts will be able to control the trajectory of TSLA. Why? Look at the volume today, nearly 10 million shares. On a big run up day, the volume can be even higher. Also, the manipulations of the shorts are only at optimal effectiveness when the longs have something in their minds of which they are fearful. The Q4 delivery numbers served that purpose up until yesterday, but that dread-inducing event has come and gone and instead we see Tesla ramping up Model 3 in an exponential fashion when viewed week by week in December (according to Gene Munster). The future for Tesla looks bright in 2018 and all that's needed for a march upward to begin is for longs to get a signal that TSLA has bottomed out. Guess what, it's coming soon.

We must not forget the change in numbers with the TSLA shorts. Up until a couple weeks ago, the number of shares controlled by shorts had been on the rise. Since then, the trend is in the opposite direction. Many shorts can exit right now with a profit. The inevitable ramping of Model 3 is coming and as soon as the SP starts heading up, more will bail, which will only put more upward pressure on the stock price.

So... there's no guarantee about when the SP will start heading up, but if today is any indication, it won't be long from now and then the fun begins. If you have dry powder, watch TSLA very closely because lots of other investors are doing just that right now.

More than 65% of today's trading was done by shorts, yet they could hardly keep TSLA from running into the green (and beyond) today.

Conditions:
* Dow up 152 (0.61%)
* NASDAQ up 12 (0.18%)
* TSLA 314.62, down 2.63 (0.83%)
* TSLA volume 9.9M shares
* Oil 61.97, down 0.04 (0.06%)

 

[AlMc]

I agree about smart shorts starting to exit. Many of them have made money and know that the risk that the SP could rise is here. The smart ones want to get out before there is more of a rush to leave causing the SP to escalate quickly.

 

[Papafox]

Today was a frustrating day for TSLA shorts. Try as they might to depress the stock price with a mandatory morning dip and an endless series of capping episodes involving walking the stock down, TSLA still gained close to $2 for the day. Both the DOW and NASDAQ were way up today. Notice the techniques used by the shorts today. We saw two mandatory morning dips, with some "whack the mole" thrown in. When those tactics failed to keep TSLA in the red, shorts resorted to capping the climbs at 316 and then walking the SP down with additional selling until they would lose control of the price and it would walk back up to create a lovely rendition of a mountain peak and then the whole process would repeat. Mid-day, one peak reached slightly over 317, which was just below the 50 DMA (which likely offered resistance).

Anyway, here's how I think the shorts played the afternoon. I suspect they wanted to push hard down in the final hour and so they created a story of descending peaks, each a bit lower than the next. Look at the 1pm, 1:45pm, 2:20pm, and 3:00pm peaks. Each tops out a bit lower than the previous one. I like to believe that much of the slow decline of each peak was a purposeful decision, and given the 60% of TSLA that shorts traded today, that idea isn't such a crazy idea. After 3:00pm a descent was started (through short-selling) to bring TSLA into the red just prior to close. Just draw a line on the descent trajectory and make up your own mind. Alas, the shorts fell prey to the same fate as last Friday. Longs have figured out that 1) sometimes you can buy TSLA at a nice discount in the final half hour of trading on a slow Friday, and 2) positive Fridays that finish on a high note often lead to nice climbs on Monday morning. And so buyers jumped in and the SP ran up in the final 15 minutes of trading for a very respectable close.

BTW, see the big spike in the after-hours trading? It looks like some trader flunked after-hours trading by not setting a price limit. Oops.

Since Nov 27, the shorts have been on the warpath, typically trading 55-65% of TSLA each day. Today's 60% trading by shorts is typical of the past month.

The 50 day moving average (blue line) has now descended to be nearly even with the TSLA stock price at close on Friday. The 50 DMA can offer both resistance and support, depending upon the direction the SP is moving. Anyone want to guess whether the shorts will try to scuttle Monday morning's amateur hour of buying (first hour of market trading)?

What should we expect for Monday? Thursday afternoon's nice recovery and today's positive trading suggest that buyers will be present Monday morning to continue the upward pressure. Shorts are not giving up and will likely try a full-court press Monday morning to head the threat off at the pass. It's going to be an exciting time, don't miss it.

Here's a point to ponder. Model S production plus Model X production for 2017, divided by the number of weeks the factory operated in 2017 yields roughly 2,000 vehicles/week or an average of 1,000 S and 1,000 X vehicles produced each week (I know there are more S cars produced than Xs, but don't get too caught up in the details). Model 3 has now reached a production rate of about 1,000 vehicles/week, which is probably higher than Model X production now. Although Tesla wants to increase Model 3 production tenfold from the current production, take a moment to appreciate what has been done in the past half year with Model 3.

Today's close of 316.58 is $5.23 higher than last Friday's 311.35. The threat of a bad market reaction to the Q4 delivery numbers is now over. Congratulations, longs, it has been a good start to 2018.

Conditions:
* Dow up 221 (0.88%)
* NASDAQ up 59 (0.83%)
* TSLA up 1.96 (0.62%)
* TSLA volume 4.6M shares
* Oil 61.44, down 0.57 (0.92%)

 

[Papafox]

Option_sniper is predicting that TSLA reaches 466 in 2018.

 

[Navin]

The out of bounds price in AH may have been a trade put on by MM to signal where they want to take tesla. Think of a baseball game where one player is signaling to another. Easy to signal in a low volume environment.

 

[Papafox]

The out of bounds price in AH may have been a trade put on by MM to signal where they want to take tesla. Think of a baseball game where one player is signaling to another. Easy to signal in a low volume environment.

Let's see... that's less than $15,000 to make the signal, but if the SP rises to that level it really has cost nothing. Hmm...

 

[Navin]

Yep. Signaling IMO. Hey guys - time to let this baby loose. Could be wrong of course but my gut tells me otherwise

 

[Papafox]

Congratulations longs on an excellent day!

A little over a week ago the controversy was whether to accept Option_Sniper's suggestion of buying in the 313 range or to wait until the Q4 delivery numbers came in before buying with any dry powder. The answer is now apparent: even though waiting for the delivery numbers gave a somewhat better opportunity, either approach would have served you well. At the end of last week, it was clear from Thursday and Friday's market reactions to the somewhat disappointing Q4 numbers that the shorts were in deep trouble, implying that TSLA would be moving higher and there was nothing the shorts could do to prevent it from happening.

And so today arrived. The buying didn't disappoint and between the feeding frenzy and the volume, the shorts had no chance of stopping the upward movement. Remember that shorts need a dread in the longs in order for their manipulative tactics to be effective and that dread was erased by last week's market reactions to the Q4 numbers. And so we went up, and up and up. TSLA quickly rose above the 50 dma and momentarily paused at 325, the middle bollinger band. Eventually it rose above the 200 day moving average by a good margin. Both of these moving averages now become support for TSLA.

The latest speculation is that surely someone has inside information about something good at Tesla, otherwise, why would the stock run up this high? I hope the speculators are correct, but another explanation is simply that lots of longs were standing by, waiting for the bottom to be confirmed after the Q4 delivery numbers before buying back in. Between the performance of Thursday and Friday and the rising SP this morning, it became safe to assume the bottom had been reached and it would be up from here. Once the longs started buying, some shorts started covering, and it was off to the races.

Where do we go from here? While there's always a chance of profit-taking after such a climb, there's also room for momentum to carry the stock higher. Usually you get at least one more day of climb after a really big climb. The upper bb stands at 347.30 today. giving lots of headroom for further climbing this week. Never a dull moment.

Conditions:
* Dow down 13 (0.05%)
* NASDAQ up 21 (0.29%)
* TSLA 33641, up 19.83 (6.26%)
* TSLA volume 9.8M shares
* Oil 61.91, up 0.47 (0.76%)

 

[AlMc]

The other reason speculating on 'why the bounce today'. Technical buying pressure. Another wedge had formed on the weekly chart and was ready to pop today..up or down...luckily up.

 

[gora321]

It looks like Falcon launch!

 

[Reciprocity]

Maybe short covering rally or mini squeeze. The dread that @Papafox referenced hit shorts when the bad news and 5% premarket move was erased and no hope for more bad news until Feb. My guess is that it continues as more shorts cover. I think a lot of shorts buy the bottom and get run over. I see tons on Twitter saying they started a short at what I would consider floors. I almost feel bad for them... Nah, not really.

 

[neroden]

We know the short-sellers in TSLA have, overall, an unenviable record of selling at the local bottoms and covering at the local tops. Seems like it's continuing.