Papafox's Daily TSLA Trading Charts

[Papafox]

GoTslaGo,
Thanks for the computations. I put the SCTY info into the daily postings to enable such calculations. My guess is that TSLA is going to do what it is going to do and SCTY will adjust, as long as investors believe the merger will go through. SCTY rising closer to the min percentage could suggest growing optimism for the deal, or it could suggest growing optimism for SCTY itself. We'll see.

 

[Papafox]

It was deja-vu all over again. Two Mondays in a row, TSLA jumped higher in the morning and never looked back. Lots of people have given their reasons for today's rise, but I believe it was the same reason as last Monday's rise, the combination of growing pressure on the shorts to leave their positions combined with a catalyst, and the catalyst in both cases was expectations of a Master Plan 2 being delivered by Elon Musk. Oh yes, there's also the similarity that both rallies began during the amateur hour of a Monday morning, a regular catalyst for a bump up as people have had a whole weekend to decide upon a purchase of TSLA shares, but a catalyst that needs support to go higher and maintain that altitude. For two weeks in a row, it has found that support.

Will TSLA build upon this Monday's performance or will it, like last week, be slowly beaten down by FUD and give up some of the gains? The jury is still out, but I see a more positive news cycle at the moment, higher short interest rates, and perhaps an imminent release of a Master Plan 2 by Elon.
Conditions:
* DOW up 17
* NASDAQ up 26
* TSLA 226.25 up 5.85 (2.65%)
* TSLA volume 3.4M shares
* SCTY 26.14 up 1.10 (4.39%)

 

[GoTslaGo]

You know I was waiting for this!

TSLA 226.25 (calc SCTY 27.60)
SCTY 26.14 (calc TSLA 214.26)

Getting closer...

 

[Papafox]

Here's Tuesday's chart. This is a chart of uncertainty. Investors saw TSLA lose all but $3.50 of last Monday's gains and some were wondering if history would repeat itself. The NASDAQ was also down, related to a Netflix miss. As long as TSLA is rising, shorts are going to be jumping ship, but the good news is that the dips were very shallow and TSLA recovered almost all of its loss by the end of after-market trading. Differences between last week and this week: Last Monday had the WSJ announce an SEC investigation of Tesla (which was untrue because the SEC is still evaluating), Master Product Plan will actually be released this week, and we're one week closer to potential lift from gigafactory opening.
Conditions: (note: some minor errors may exist because these were figured one day late)
* DOW up 25.96 (1.40%)
* NASDAQ down 19.41 (3.84%)
* TSLA 225.26 up 4.86 (2.21%)
* TSLA volume 3M shares
* SCTY 26.26 up 1.22 (4.87%)

 

[Papafox]

Today the uncertainly for TSLA investors lightened as Elon confirmed he would release the second Master Plan. Right after opening, TSLA took a dip to nearly the red before immediately recovering, on no news. This dip was likely a meger attempt by shorts to strike some fear and uncertainty into traders. It didn't work. Seriously, if you had a large number of shares to sell on a day that has been trading up in pre-market, would you dump them all at once and diminish the money you receive for them? I think not.

Take a look at the spike in SP at 3:08pm. This was one minute after Elon tweeted that he would release Master Plan 2 later that evening. I continue to strongly believe that anticipation of SMP2 was a significant catalyst for helping TSLA climb these past two weeks.

Conditions:
* DOW up 36 (0.19%)
* NASDAQ up 53 (1.06%)
* TSLA 228.36 up 3.10 (1.38%)
* TSLA volume 2.6M shares
* SCTY 26.95 up 0.59 (2.63%)

 

[Papafox]

Today was the day after Elon released his Master Plan 2, and the market was less than thrilled today. I see the drop to the support level of 220 as TSLA giving up some of the gains it received from anticipation of the Master Plan.

Concerns included fears that new projects would impede the on-time arrival of Model 3 and general concerns that short-term profitability could be lessened as Tesla broadens its product line. An interesting example is Adam Jonas of Morgan Stanley. Jonas must personally be thrilled that Tesla is long-last open about implementing an Uber-like drive service for autonomous vehicles (after all of his statements in the press and unsuccessful questioning of Elon Musk. Ultimately, Jonas indicated no positive changes in his TSLA valuation. Part of the reason is that Morgan Stanley helped sell the last equity offering, and whatever purchasers were told about 2016 profit expectations took a radical change when Tesla announced plans to acquire SolarCity. Thus, concerns about 2016 overruled the bigger picture for Tesla in the mind of many investors and analysts.

Conditions:
* DOW down 78 (0.42%)
* NASDAQ down 16 (0.31%)
* TSLA down 7.86 (3.44%)
* TSLA volume 4.4M shares
* SCTY down 0.55 (2.04%)

 

[Papafox]

A number of TMC Investor forum members including myself have tried to catch these wild price swings in after-hours trading as you see around 5 pm, but we cannot, and one needs to disregard them. Why do they occur? The obvious answer is that someone wants to mess up the charts I share with you. Of course!

Nonetheless, TSLA did show that 220 is a strong support level once again. What can we expect for Monday? I've been of the opinion that the anticipation of SMP2 was the catalyst that allowed the high interest rates and other pressures on shorts to get a buy-to-cover frenzy underway over the past two Mondays. Why Mondays? We often see buying during the first hour of a Monday as investors have pondered a purchase over the weekend, and this bump during the first hour of trading can get things rolling. Once the stock starts climbing, more shorts get nervous, and there you have it, a nice climb. My guess is that we won't see a strong climb on Monday because SMP2 is now behind us, but let me hedge my bet a bit. Since we've had two strong Mondays in a row, shorts may be nervous and some little news item may set them off to covering. It'll be fun to watch and see what happens.

Conditions:
* Dow up 54 (0.29%)
* NASDAQ up 54 (0.52%)
* TSLA up 1.77 (0.80%)
* TSLA volume 2.6M shares
* SCTY 26.45 up 0.05 (0.19%)

 

[GoTslaGo]

I saw this from @Gerardf (he saw this and posted in short term)

neonacr - $TSLA I put an order in to sell my 250 shares at $281.88 in ... | StockTwits

Sounds like a fat finger AH trade messed things up this time...poor guy.

 

[Papafox]

I saw this from @Gerardf (he saw this and posted in short term)

neonacr - $TSLA I put an order in to sell my 250 shares at $281.88 in ... | StockTwits

Sounds like a fat finger AH trade messed things up this time...poor guy.

Yeah, I saw that post too, but I am wondering if someone just made it up after seeing the $181.88 sale of 250 shares. Think about it, why would the brokerage skip all the many higher buy requests and go for one that exactly matches the stated sales price? I would think if this was a legitimate sale that the seller could go back to the brokerage and say "you didn't do your job. There were much higher buy orders out there, why did you skip over them?"

 

[GoTslaGo]

Yeah, I saw that post too, but I am wondering if someone just made it up after seeing the $181.88 sale of 250 shares. Think about it, why would the brokerage skip all the many higher buy requests and go for one that exactly matches the stated sales price? I would think if this was a legitimate sale that the seller could go back to the brokerage and say "you didn't do your job. There were much higher buy orders out there, why did you skip over them?"

Good point!

 

[Papafox]

Cha-ching! Three super Mondays in a row is mighty fine. I'm glad I hedged my bet about this Monday because we did see two substantial news items: word of a press day at the gigafactory on Tuesday and word that the gigafactory is well ahead of schedule and with expedited construction underway. My feeling has been if we closed above 230 today (and we did, just barely), any good news from the gigafactory press day would send TSLA higher.

Conditions:
* DOW down 78
* NASDAQ down 3
* TSLA 230.01 up 7.74 (3.48%)
* TSLA volume 4.5M shares
* SCTY 27.50 up 1.05 (3.97%)

 

[austinEV]

Yeah, I saw that post too, but I am wondering if someone just made it up after seeing the $181.88 sale of 250 shares. Think about it, why would the brokerage skip all the many higher buy requests and go for one that exactly matches the stated sales price? I would think if this was a legitimate sale that the seller could go back to the brokerage and say "you didn't do your job. There were much higher buy orders out there, why did you skip over them?"

I am in the habit of placing after hours bids to buy at a 9 dollar discount or sell to a 9 dollar premium. Those trades expire every time, even in sessions with these aberrant trades. So if they really were retail investors typing the wrong numbers my bids would have to get taken out first and they don't. I think that guy is full of it. I don't think I had a bid that day, but I have had them other days when something wild happened.

 

[Papafox]

Gosh, this is almost like the olden days when shorts were on the warpath. You can see from the very deep downward stabs, following immediately by near-recoveries, that the short-sellers were selling in fairly large orders in order to artificially knock the SP down today. I say this is manipulation because if you are trying to sell your stock for maximum profit, you would not sell so many shares within the span of a minute. Just look how quickly the SP recovers every time there's a deep stab downward.

Nonetheless, anticipation of the gigafactory media day provided incentive for longs to buy in, and you can see in the afternoon that TSLA twice almost went green but was batted down at the last moment by selling. Coincidence? I think not.

Conditions:
* DOW down 19 (0.10%)
* NASDAQ up 12 (0.24%)
* TSLA 229.51 down 0.50 (0.22%)
* TSLA volume 3.4M shares
* SCTY 27.43 down 0.07 (0.25%)

 

[Papafox]

I love the manipulation shown here today. Start with a deep dip after opening to scare the longs, it didn't work and TSLA hit 233 briefly. At 11:35am, a selling-spree of 70,000+ shares took place in just 4 minutes. This rapid-sell lowered the TSLA price into the red. From there, about 15 interventions were needed by the shorts to keep TSLA in the red. Notice the push to take TSLA lower during the final 20 minutes of trading. I particularly like the buyer who grabbed 50,000 shares right after hours to take advantage of the clearly-manipulated ending to the day. Bottom line: the shorts expended a good amount of ammo keeping TSLA from running up today. For anyone paying attention, the tendency for upward movement is there. It's only a matter of when.

Conditions:
* DOW down 2
* NASDAQ up 30
* TSLA 228.49, down 1.02 (0.44%)
* TSLA volume 2.9M shares
* SCTY 27.36, down 0,.07 (0.26%)

 

[3Victoria]

@Papafox -- I really enjoy your analyses. Here is a trial balloon from a neophyte .. shoot it down as you like.
Would this scenario explain todays action: a short wants to close out his position, but obviously buying 200,000 shares a one time would cause a large blip and might cause a panic among other shorts, creating a stampede for the exits. So, instead, he buys 100 shares every 10 secs, say. The stock climbs slowly, his cost is the average of the sloped segment. At some point it triggers other shorts to buy and the slope increases. At that point, he sells half (say) of the shares to bang down the stock, hopefully sucking in some longs into taking their profit. Then repeat and rinse. Todays chart has several slow rises with accelerations and then a dip. Unfortunately, for my hypothetical short, the slam-downs don't succeed in returning the stock back to base, and the slow rise continues through the day.

 

[Papafox]

Today clearly began as a tug-of-war between bears and bulls, with bears (shorts) losing the ability to hold TSLA down from about 1pm until the end of trading. I like to characterize the trading today as being the rise in TSLA that should have taken place yesterday but was delayed a day by serious efforts of well-timed selling by the shorts. In short, they used up too much of their ammo yesterday and couldn't short enough shares today to counter the direction the market wished to pull TSLA. I would say the rather flat trading around 3pm is indicative of a shorts attempt to hold TSLA near 230 which proved unsuccessful and the 3:30pm dip to be another short-initiated effort that proved equally unsuccessful.

Particularly interesting is the opposite movement of TSLA and SCTY to each other

Conditions:
* DOW down 16
* NASDAQ up 15
* TSLA 230.61, up 2.12 (0.93%)
* TSLA volume 2.4M shares
* SCTY 26.88, down 0.48 (1.75%)

 

[Jayjs20]

50k shares sold at 230.35 at the start of AH today again.

If you're right and they're out of ammo, and if they're buying back ammo right there, could that be a new minimum resistance level? Or, would they sell at a loss in order to push it sub 230?

 

[dakh]

Low volume day, so should have been easier to push things around, yet green.

 

[neroden]

Over in the short-term thread, I think we figured out why the arbitrage gap widened. We've mostly been considering the exchange rate in the offer (.122 to .131).

But there are probably some major traders out there who instead looked at the dollar value of the offer, assuming that if TSLA went up, they would reduce the exchange rate offer. (I personally think they're wrong about this assumption, but they exist. THIS IS NOT INVESTMENT ADVICE. Do your own research to determine whether they're right.)

Based on the TSLA closing price at the date of the offer, the dollar value of the merger offer values SCTY stock at $26.79. The "dollar value conversion" offer range in the letter is $26.50 to $28.50. Therefore, as long as this type of trader is out there in large numbers -- a trader who values the merger by dollar value rather than exchange ratio -- there will be resistance for SCTY around $26.50-$27. And this is precisely where the merger arbitrage gap reopened.

If TSLA drops below the $219.61 closing price on the date of the offer, traders following an exchange-ratio thesis may dominate again and SCTY should track TSLA. (Or maybe the merger arbitrage gap will remain open because people think the merger won't happen. What do I know.)

 

[Papafox]

The way I see things, on Wednesday, TSLA wanted to climb higher because of good news revealed at Tuesday's gigafactory press day, even approached 233, but was constrained by a quick response of short selling and closed lower. Thursday, the short selling tried to constrain TSLA again, but TSLA broke free and climbed into the green. By Friday, there was no holding TSLA back and it jumped up quickly in the morning. So... I rather believe that what we saw happen on Friday is what the longs wanted to do with TSLA on Wednesday, but the influence of the shorts delayed the real climb for two days.

Conditions:
* DOW down 24
* NASDAQ up 2
* TSLA 234.79, up 4.18
* TSLA volume 3.1M shares
* SCTY 26.70, down 0.18