Papafox's Daily TSLA Trading Charts

[bdy0627]

Now let's zoom in to the dip in February to see how these indicators played out. That reversal was quick with no indecision at the bottom.

Here's the daily chart. Notice just how far the stock dove below the lower bb on Feb 9th.

Now here's the zoomed in hourly chart:

Notice the high volume candles, red and green. The buying support is strong as demonstrated by the green candles with growing volume. The reversal is clear.

The take home point I think is to carefully look at the buying support even when the stock dips below the lower bb. If the response seems indecisive, beware. It's safest just to wait until it becomes clear. Much better to have missed adding at the bottom than to have added leverage before an additional big drop. I have mistakenly guessed at the bottom several times, adding leverage. I hate seeing paper losses accumulate as the dip worsens, but each time I have added more leverage near the eventual bottom anyway and have ended up coming out of the dip with profits.

 

[bdy0627]

Here's the current hourly chart for comparison with this climb, looking at the selling response.

High volume green candles with much weaker red candle volumes indicating relatively weak selling interest. If you're short, this isn't what you want to see...

 

[Papafox]

Okay, here's my summary of what I understand from the recent conversation with @pz1975 and @bdy0627 regarding using the bollinger bands to leverage and derisk your TSLA trading shares and options. I also inject my own ideas. Feel free to correct/suggest.

Overview and Incentive
* Looking at the previous two years of trading, we can see that TSLA has bounced up and down between lower and upper bollinger bands regularly. The SP seldom remains outside the bollinger bands for more than a few days at a time.
* An investor who can use the bollinger bands to leverage and derisk can substantially increase profits on trading shares/options if bottoms and tops can be accurately guessed.

Concepts
* Many turning points in SP movement with TSLA have taken place when the SP reaches or blasts through a bollinger band.
* When the SP descends to or below the lower BB, one should look for a decrease in volume on red days and an increase in volume on green days to indicate more of an appetite for buying than selling, and therefore a real chance for a climb to begin. An increase in volume overall also suggests a reversal. Without confirmation that the SP is about to turn around, a whole new leg of descent can take place, with lower BB sprinting to catch up with the descending SP.
* When the SP climbs to or above the upper BB, a decrease in volume on green days followed by an increase in volume on red days may mark a turning point where you may wish to deleverage. The fear is that sometimes such as in June of 2017 the SP will continue to rise after penetrating the upper BB, causing the upper bb to rise quickly as the SP sometimes spends a day or two outside the upper BB, comes inside, they creeps outside again during a long run upward.

The Current Situation
TSLA has recently blasted through the upper BB. Is it time to deleverage? Signs pointing to "No" include:
* The green days had LOTS of volume and red days had much lighter volume, suggesting that on selling days there's not much demand for selling, which suggests a pause rather than a reversal
* A huge run-up is likely coming. Losing a 10% climb day is potentially worse than sitting out a dip.
* It's all about Model 3 production ramp right now.. Technicals will be trumped by fundamentals when those fundamentals are Model 3 production ramp.

 

[bdy0627]

The bollinger bands are very helpful, but I still haven't found anything as tradeable as the fact that TSLA after reversing from a dip has always climbed to 85% of a prior peak. I went back and looked at the earlier years and added them to my dataset, so I now have a spreadsheet with all of the dips and climbs dating back to early 2012. I still was not able to find a single time when TSLA did not climb after a dip to at least 85% of the prior peak within 24 trading days at the very most, and usually much quicker. This means that adding leverage once a dip reaches 15% and beyond has ALWAYS been rapidly profitable as long as you aren't buying calls expiring within a few weeks. I haven't yet found anything like that for when to sell on the climbs.

 

[Papafox]

Another wave of good news arrived for trading today in the shape of good delivery circumstantial evidence and news about autopilot that should help with gross margins. On the "Found a LOT of Teslas in a Tesla Lot" thread, reports over the weekend were for large numbers of Teslas in the Fremont south lot again, possibly more than ever. Instead of 8 car carriers typically present recently, a witness saw 10 carriers. We really cannot determine production rate on such scant evidence, but it is positive evidence, all the same. Then, Elon tweeted about the presence of full self driving features in the August release of autopilot. Such a tease will increase the take rate of both normal autopilot and FSD offerings, which work out to send 99.999% of that cash to enhance gross margins because the autopilot software is pretty much a no-cost item for each additional vehicle it is added to at Tesla. Consequently, the market was ready to bid TSLA up again, and with it sitting right about upon the upper bollinger band after the end-of-week consolidation, it was off to the races again. Again, let me echo the words from my last post, which is that playing the leverage/deleverage game right now is too risky if you are deleveraging because you can miss a very big up day (almost 5% today).

Looking at specifics for the day, we could tell it would be a big day when 261,000 shares traded hands in the first minute of market trading. I'd expect a fair amount of those shares to be shorts covering as the rally out of the recent trading range has indeed begun.Then at 10:28 we saw 129,000 shares purchased in a single minute. Sweet. Importantly, volume was up heavily (13.1M shares) on this green day. Macros were slightly up, which is a great environment in which TSLA can climb. Regarding macros, we may not see anything definitive come out of the Trump/Kim meeting in Singapore, but the meeting does offer the possibility of a big up or a big down day for the broader markets, so beware.

Looking at the technical chart, I want you to see the steep climb angle of the upper bb at the moment. This is similar to the June climb of last year when the upper bb was sprinting to keep up with the SP increases. At some point we should see the SP spend more time inside the bb than outside, but riding the upper edge of the bb. Since the previous ATH was 389ish, there's plenty of room to run should news from Tesla continue to be positive, especially with the Model 3 ramp.

One reason for the enthusiasm by longs right now is that Tesla's descent from the last ATH created a descending triangle as the SP weaved between the high and low ends of that triangle, but in a generally downward direction. Technical traders who look at the triangle now see TSLA in a clear breakout. Looks like TrendTrader's comment last week in another thread that the rally has already begun was accurate. Today TSLA climbed above the 200 day moving average after taking out the 50 DMA last week.

Look for more climb-consolidate-repeat patterns ahead, as long as news remains positive.

Conditions:
* Dow up 6 (0.02%)
* NASDAQ up 14 (0.19%)
* TSLA 332.10, up 14.44 (4.55%)
* TSLA volume 13.1M shares
* Oil 66.07, up 0.33 (0.50%)

 

[Waiting4M3]

View attachment 308820
Another wave of good news arrived for trading today in the shape of good delivery circumstantial evidence and news about autopilot that should help with gross margins. On the "Found a LOT of Teslas in a Tesla Lot" thread, reports over the weekend were for large numbers of Teslas in the Fremont south lot again, possibly more than ever. Instead of 8 car carriers typically present recently, a witness saw 10 carriers. We really cannot determine production rate on such scant evidence, but it is positive evidence, all the same. Then, Elon tweeted about the presence of full self driving features in the August release of autopilot. Such a tease will increase the take rate of both normal autopilot and FSD offerings, which work out to send 99.999% of that cash to enhance gross margins because the autopilot software is pretty much a no-cost item for each additional vehicle it is added to at Tesla. Consequently, the market was ready to bid TSLA up again, and with it sitting right about upon the upper bollinger band after the end-of-week consolidation, it was off to the races again. Again, let me echo the words from my last post, which is that playing the leverage/deleverage game right now is too risky if you are deleveraging because you can miss a very big up day (almost 5% today).

Looking at specifics for the day, we could tell it would be a big day when 261,000 shares traded hands in the first minute of market trading. I'd expect a fair amount of those shares to be shorts covering as the rally out of the recent trading range has indeed begun.Then at 10:28 we saw 129,000 shares purchased in a single minute. Sweet. Macros were slightly up, which is a great environment in which TSLA can climb. Regarding macros, we may not see anything definitive come out of the Trump/Kim meeting in Singapore, but the meeting does offer the possibility of a big up or a big down day for the broader markets, so beware.

View attachment 308822

Looking at the technical chart, I want you to see the steep climb angle of the upper bb at the moment. This is similar to the June climb of last year when the upper bb was sprinting to keep up with the SP increases. At some point we should see the SP spend more time inside the bb than outside, but riding the upper edge of the bb. Since the previous ATH was 389ish, there's plenty of room to run should news from Tesla continue to be positive, especially with the Model 3 ramp.

One reason for the enthusiasm by longs right now is that Tesla's descent from the last ATH created a descending triangle as the SP weaved between the high and low ends of that triangle, but in a generally downward direction. Technical traders who look at the triangle now see TSLA in a clear breakout. Looks like TrendTrader's comment last week in another thread that the rally has already begun was accurate. Today TSLA climbed above the 200 day moving average after taking out the 50 DMA last week.

Look for more climb-consolidate-repeat patterns ahead, as long as news remains positive.

Conditions:
* Dow up 6 (0.02%)
* NASDAQ up 14 (0.19%)
* TSLA 332.10, up 14.44 (4.55%)
* TSLA volume 13.1M shares
* Oil 66.07, up 0.33 (0.50%)

I see now that TT007 posting is not really a good indicator of the direction of the SP, but may be a good indicator of volatility, option traders could take advantage of that

 

[Papafox]

* Percentage of selling by shorts on 6/11 was 48.8%, according to shortvolume.com. Low percentage makes sense when you consider that bulls on a buying spree = steamroller to shorts trying to manipulate. Notice a tendency to dip from 60-something percent for much of the past 2 months to about 50-something percent now.

* The third catalyst to help TSLA run up today was exceptionally strong price when Chinese battery maker CATL went public. The implications are that a fair valuation of Tesla's Gigafactory has been likely understated significantly.

 

[Papafox]

What a day. TSLA ran up to nearly 355 before seeing a big falloff start about 1:15pm. Nonetheless, the stock close up more than $10. Much of the runup may have started when Key Bank indicated that by checking various Tesla stores ("dealerships" in their words) they saw an increase of deliveries by about 50% over last month, which suggests production bottlenecks are falling away (something TMC investors have known for a while now) and stated that the bear cases are fading away in the short term. About the time of the afternoon dip, Tesla put out a communication that they intended to trim their workforce by 9% but not touch production workers. James Albertine suggested that those trimmed were primarily on the solar side. Normally, such a statement would be welcomed strongly by investors because it means better profitability ahead, but in this case shorts jumped on the news with an interpretation that the cuts were a desperate attempt to somehow reach profitability in Q3. Thus, we saw short percentage of selling increase to 52.9% and a greater than $10 decline in the afternoon.

The technical chart sheds light on today's activity. Notice how high the gapped trading of TSLA was above the upper bollinger band (green line). This was a perfect setup for a bear attack because the reasons for the incredible price rise in the morning were not really substantial enough to stick the price in the 350s, and we saw what transpired on Tuesday of last week, a descent towards the upper bb after an enthusiastic rise. So, we're now in day two of TSLA residing well above the upper bb, and usually the SP merges with the upper bb within a few days, unless the news is particularly bullish. What we have now is a near vertical upper bb that somewhat resembles the upper bb in June of 2017 when we saw a great run of TSLA, so it looks like history is repeating.

Hopefully, you can view the technical chart above. Notice that October of 2017 was the last month when we saw more than 3 green days in a row. History suggests that tomorrow will be a red day as TSLA consolidates towards the upper bb. On the other hand, the descent of the SP on news that should normally be considered positive for TSLA might result in buying tomorrow, and so the jury is out regarding what to expect, but if I were a betting man I would expect a consolidation downward toward the upper bb.

How should you play these rises, overshoots of the upper bb and then corrections? If you are a trader spending the day in front of a computer, consider doing some selling when the SP tops out when it is well above the upper bb and buying back in when the consolidation is more complete. If you are like most of us and have day jobs, consider leaving your investment in and allowing it to rise at a good rate on its own. There's a good chance we're in a rally that will take TSLA to a new ATH if you show a little patience, so enjoy being invested in this company as it pushes the limit on how quickly it can rise.

Conditions:
* Dow down 2 (0.01%)
* NASDAQ up 44 (0.57%)
* TSLA 342.77, up 10.67 (%)
* TSLA volume 22.1M shares
* Oil 66.01, down 0.09 (0.20%)

 

[felipey]

The

is not showing, could you please repost? And thanks for the insight, it's very well articulated and thought out.

 

[bdy0627]

Today was the 5th day in a row where the stock spent time WAY above the upper bb. I don't believe this has ever happened before. Even back in 2013 with the huge breakout gap up starting May 9 with the first profitable quarter for Tesla, there were only 4 days in a row well above the upper bb like we've had recently. The stock rose from $55 to over $190 in the span of 5 months, but it went up in a pretty orderly march other than that initial 4 days including the gap up. What we are seeing right now is quite similar to those initial 4 days. Here is the 2013 chart:

 

[Papafox]

@felipey , here's the tech chart referenced in my last post. For some reason, TMC's forum is not happy with my posting the image in full size. I have resampled the image a few times and tried both jpg and png. The workaround appears to be loading the thumbnail and then coming back to load the full-sized image (and removing the thumbnail when I see it works). Weird.

The easiest way to see the patterns of red vs green days on the chart is to look at the very bottom where the volumes are shown. Red days are shown as red, of course, and green days are shown as black.

The fact that 53% of the selling today was by shorts is absolutely nuts. They're still trying to manage this breakout. Granted they might get a dip with bad macros, FUD and bad news, but this is really a matter of tossing good money after bad. They should know better by now (but of course they don't).

 

[Papafox]

Please forgive the thumbnails instead of a full images but the issue of displaying my full images at TMC forums continues.

Today was somewhere between negative consolidation and enthusiastic buying. In pre-market trading we did see enthusiastic buying by longs, but that faded, and shortly after open the shorts engineered their hallmark mandatory morning dip. That dip was defeated early and the stock ran up for a while in celebration, but shorts then walked it down. The rest of the day looked like moderate buying pressure and an equal amount of "whack-the-mole" negative pressure by shorts. As a result, TSLA closed with a minimal gain. Please note at in the final minute of market trading today, 442,000 shares traded hands and since these were at a time when buying has little effect upon the SP, the buyer was likely shorts covering. Just about half of selling today was by shorts, continuing the downward move from the 60% selling numbers so common in the previous two months. Please note that the broader markets sold off during the final 40 minutes of trading today but TSLA held up much better, suggesting strength.

Things began livening up in the after-market trading when Elon announced he had just purchased $25 million in Tesla stock over the past two days. The implication, of course, is that he expects the SP to go higher from here, and so others are jumping on the magic carpet for the ride as well. The after-market rise in SP should help tomorrow's trading.


Looking at the tech chart, you can see the real value of today. The upper bollinger band has risen to 341.71, ascending quickly to catch up with the SP and legitimize further climbing. Yes, today was also the first day since October of last year when TSLA strung 4 consecutive up days in a row.

Conditions:
* Dow down 120 (0.47%)
* NASDAQ down 8 (0.11%)
* TSLA 344.78, up 2.01 (0.59%)
* TSLA volume 9.1M shares
* Oil 66.64, up 0.28 (0.42%)
* Percent of selling by shorts: 49.6% (from FINRA data)

 

[neroden]

* Percentage of selling by shorts on 6/11 was 48.8%, according to shortvolume.com. Low percentage makes sense when you consider that bulls on a buying spree = steamroller to shorts trying to manipulate. Notice a tendency to dip from 60-something percent for much of the past 2 months to about 50-something percent now.
View attachment 308875

* The third catalyst to help TSLA run up today was exceptionally strong price when Chinese battery maker CATL went public. The implications are that a fair valuation of Tesla's Gigafactory has been likely understated significantly.

Yeah. I actually wanted to invest in CATL but investing in Shenzhen listings from overseas is the opposite of straightforward (and possibly not even legal).

 

[neroden]

I eagerly await your analysis for today, after market close.

 

[Papafox]

I'm thinking this page is so saturated with images that I need to get to the next page before full-sized images can easily be displayed.
For
this
reason
I
am
taking
up
room
to
get
to
the
bottom
of
this
page
so
we
can
start
a
new
page
and
once
again
display
the
full-sized
images.

 

[Papafox]

Please
indulge
me
while
I
progress
as
quickly
as
possible
to
the
next
page.
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>>>>>
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>>>>>>>>

 

[Papafox]

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[mongo]

length of post doesn't matter
but my inane post does

 

[Sudre]

are we there yet?

 

[mongo]

no