Papafox's Daily TSLA Trading Charts

[Papafox]

After our Tesla Tuesday we evolved into an undecided Wednesday, which let to an up Thursday with game-playing in the low-volume trading of afternoon. Notice that morning rises and afternoon drops are not mirroring the broader markets. It just doesn't require much money to manipulate TSLA on such thin trading. For example, see that big decline at 1:30pm where TSLA plunges about a full point? That drop occurred with about 4,000 shares traded, less than a million dollars selling. If you are a big short seller, you can indeed manipulate TSLA pretty easily during the slim trading times of an August afternoon.

Nonetheless, we've seen TSLA continue to work its way back and forth through the $220-$230 range, and we see the selling pressure typically happen in the afternoons when volume is down. Until the news changes, the cycles will continue.

Conditions:
* Dow up 24 (0.13%)
* NASDAQ up 11 (0.22%)
* TSLA ,223.51, up 0.27 (0.12%)
* TSLA volume: 1.7M shares
* SCTY 23.42, down 0.17 (0.72%)

 

[geneclean55]

View attachment 190618
After our Tesla Tuesday we evolved into an undecided Wednesday, which let to an up Thursday with game-playing in the low-volume trading of afternoon. Notice that morning rises and afternoon drops are not mirroring the broader markets. It just doesn't require much money to manipulate TSLA on such thin trading. For example, see that big decline at 1:30pm where TSLA plunges about a full point? That drop occurred with about 4,000 shares traded, less than a million dollars selling. If you are a big short seller, you can indeed manipulate TSLA pretty easily during the slim trading times of an August afternoon.

Nonetheless, we've seen TSLA continue to work its way back and forth through the $220-$230 range, and we see the selling pressure typically happen in the afternoons when volume is down. Until the news changes, the cycles will continue.

Conditions:
* Dow up 24 (0.13%)
* NASDAQ up 11 (0.22%)
* TSLA ,223.51, up 0.27 (0.12%)
* TSLA volume: 1.7M shares
* SCTY 23.42, down 0.17 (0.72%)

Using this same logic, I wonder if market makers will push it to either 225, or 227.5 tomorrow afternoon. Monthly options expire tomorrow.

 

[Papafox]

Using this same logic, I wonder if market makers will push it to either 225, or 227.5 tomorrow afternoon. Monthly options expire tomorrow.

Normally I would say 225, but 227ish certainly is possible. I think traders often abandon TSLA in the afternoon because of a tendecy to slump, but if we can keep a shallow climb going in the afternoon it would raise enough eyebrows to persuade the traders to stick around, I suspect. Will be cheering on the tractor beam tomorrow.

 

[Papafox]

Thanks to the market maker tractor beam operating in an afternoon with low volume and monthly options expiring, TSLA shrugged off its red dip and climbed to close at 225. Although maximum pain was at 227.5, the SP 225 could be reached much easier, since it was midway within the recent trading range, and so it was the number TSLA closed at today.

Checking out the percentage of the day TSLA traded in the green, you can see that on Tuesday of this week, we were in the red most the day, on Wednesday TSLA traded about 50/50 green/red, on Thursday TSLA traded up most of the day, and so it did again today. We continue repeating the patterns from the previous two weeks.

As for Monday, TSLA is only midway up the trading range and we're on an uptrend, so some additional gains are possible, but due to last Monday's morning rise, afternoon fall, shorts are likely less concerned about Mondays than they were last week, and so setting off some type of panic buying in early trading is not as likely.

Conditions:
Dow down 45 (0.24%)
NASDAQ down 2 (0.03%)
TSLA 225, up 1.49 (0.67%)
TSLA volume 1.7M shares
SCTY 23.50, up 0.08 (0.34%)

 

[Papafox]

With last week's runup on Monday and then forfeit of all gains that same day, shorts have for the time being lost their fear of Monday mornings. Although the chart above looks rather dramatic, it's only because the scale is so fine. In reality, we were trading within $2 of opening price for most of the day. SCTY lost twice the percentage amount compared to TSLA today, with at least one news story scorning the 6.5% interest paid on new debt. It's possible that SCTY could have had a bit of a drag effect of TSLA today, as many investors assume the deal will go through.

Conditions:
Dow down 23 (0.12%)
NASDAQ up 6 (0.12%)
TSLA 222.93, down 2.07 (0.92%)
TSLA volume 1.7M shares
SCTY 23.02, down 0.48 (2.04%)

 

[apharris]

Another view: Intermediate Term Linear Trend Regression Channel is drifting lower. It would take a robust rally above the channel to turn intermediate term long. Buy Signal above $240.

 

[Papafox]

What a pleasure to see only green! About 11am Tesla announced there'd be a new product announcement at 3pm Eastern, noon Pacific. That announcement turned out to be the 100kwh battery and the now 2.5 second 0-60mph P100D. This announcement offered plenty of opportunities to TSLA traders. One opportunity was to sell some stock or calls near the high of the day and expect this to be another "buy the rumor, sell the news" event. Yep, it turned out that way, and I bought back in after the drop because $1.80 gain for the day was way too little a jump for such a potent demand lever and GM enhancer as the P100D. As the day progressed, you can see that investors realized the error of underpricing this event and started bidding up the SP in after-hours trading. So, some of us benefitted twice: first with the sell high and buy low immediately after the announcement and then with the recovery in after-hours trading.

Another important aspect of today's trading has to do with the chart posted above by apharris. Notice that although TSLA has been trading within the 220-230 range for quite some time, the general trend is a slow decline. With today's news, TSLA has a newfound spark of optimism, and that slow decline can now be countered.

Notice the return of normal volume today.

Conditions:
Dow up 18 (0.10%)
NASDAQ up 15 (0.30%)
TSLA 224.84, up 1.91 (0.86%)
TSLA volume 4.8M shares
SCTY 23.09, up 0.07 (0.30%)

 

[Papafox]

The day started out much as expected, with a run up to match the after-hours closing price of yesterday. Unfortunately, the broader markets were down and a large amount of negative press was circulating (Elon and cousins buying SCTY bonds, etc.) and so TSLA chose to pretty much follow the NASDAQ, which dropped off in the afternoon. The deep dips, followed by near-immediate recoveries, were not present today, so I can't blame today's trading on the shorts.

Looking down the road a ways, we see the Q3 delivery numbers set to be released in less than 40 days. The shorts are likely to get nervous as we approach that date, and traders are likely to buy in. If TSLA does nothing but remain in the 220-230 range until that upturn, we will be well-positioned for the 3Q delivery numbers release. Expect more FUD in next few weeks as shorts try to find an attractive exit point prior to October.

Conditions:
Dow down 66 (0.35%)
NASDAQ down 42 (0.81%)
TSLA 222.62, down 2.22 (0.99%)
TSLA volume 2.5M shares
SCTY 22.50, down 0.59 (2.56%)

 

[Papafox]

Today TSLA dropped along with the broader markets at about 1:30pm, but instead of rebounding somewhat, as the broader markets did, TSLA dropped a bit further. The continued drop after the NASDAQ started to recover could have been the result of shorts taking advantage of the low volume to push TSLA down even more. We've seen strong support at 220 (actually it's more like 219.75 which leads to a 220 recovery soon). For this reason, it's entirely possible for shorts to try and test the 220 support tomorrow. If they are unsuccessful, the tactic could backfire and TSLA could head higher. Expect continued pressure from shorts with creative trading in the next few weeks as they seek profitable exit points before the October release of Q3 delivery numbers.

Conditions:
Dow down33 (0.18%)
NASDAQ down 5 (0.11%)
TSLA 220.96, down 1.66 (0.75%)
TSLA volume 1.8M shares
SCTY 22.36, down 0.14 (0.62%)

 

[GoTslaGo]

At least down days are low volume.

 

[neroden]

At least down days are low volume.

This is actually normal. It's relatively rare to have high volume and dropping prices; most bear markets are low volume. Dunno why volume correlates with rising prices, but it has for over 100 years.

 

[neroden]

xpect continued pressure from shorts with creative trading in the next few weeks as they seek profitable exit points before the October release of Q3 delivery numbers.

Next significant date I see is Sept 14 when the 'go shop' period expires, followed immediately by September options expiration on the 16th. We'll all be watching to see how fast SEC approval goes but if it's greased to move fast, we could be voting before the release of Q3 delivery numbers.

 

[Papafox]

Next significant date I see is Sept 14 when the 'go shop' period expires, followed immediately by September options expiration on the 16th. We'll all be watching to see how fast SEC approval goes but if it's greased to move fast, we could be voting before the release of Q3 delivery numbers.

There's something I don't understand here. The SEC just agreed there's no anti-trust issues with the SCTY acquisition. What additional approval is needed from the SEC before a vote can happen?

 

[neroden]

There's something I don't understand here. The SEC just agreed there's no anti-trust issues with the SCTY acquisition.

No, that's the FTC.

What additional approval is needed from the SEC before a vote can happen?

Basically, the SEC has to approve the proxy statements -- agree that they are not misleading to investors (voters).

If the managements of SCTY and TSLA do a really good job with the proxy statement, SEC approval could be lightning-fast. If they write it really badly, it could take several rounds of back-and-forth to get the text fixed.

 

[Papafox]

Gosh, the shorts gave me an early birthday present by doing exactly what I predicted today. We started the day nicely up but then came the big plunge around 12:30pm where (I believe) the shorts were testing the 220 support level. Their answer came in a quick rebound in SP that the 220 support was still alive and well. For the remainder of the day, longs tried to bring the SP up and shorts tried to get the SP to close below 220. On the short-term forum I predicted the possibility of a 219.99 close and my prediction came true to the penny. It's nice when the planets align.

So, where do we go from here? TSLA is sitting right on the bottom of the 220-230 range. Do we move up to more comfortable spots toward the middle of the range or do we settle lower next week? Since news is pretty quiet right now, much has to do with what the broader markets do and what type of press Tesla receives over the weekend and through the week. Being named the most innovative company by Forbes doesn't hurt, but at this point investors are more interested in the shorter term deliveries and financials plus whether Model 3 will be on time and profitable. Let's see what the media brews up in the next few days.

I continue to believe that shorts are trying to manufacture an attractive exit point prior to the Oct delivery-number dates. Since there's no evidence that short positions are increasing, I think what you're seeing instead is creative buying and selling to induce drops at critical times. At some point, if good enough news surfaces, and TSLA starts climbing again, you could see the same panic buying by shorts we saw a few weeks ago and some nice near-vertical ascents.

Keep in mind that for the SCTY acquisition to go forward, investors have to vote yes, and the SP at the time of the vote will be a factor influencing the vote. For this reason, Tesla has a reason to avoid a deep drop in the SP, and I see this motivation as a counteracting force to the desires of shorts to manufacture a lower exit point in the next few weeks. Tesla can release positive information in public events (this coming week's Sunday Socials, perhaps?) if they desire to give the SP a temporary boost. My hope is that the 3Q delivery numbers are sufficient to boost the SP high enough to get big investors comfortable enough with the SCTY acquisition to vote yes.

Conditions:
Dow down 53 (0.29%)
NASDAQ up 7 (0.13%)
TSLA 219.99, down 0.97 (0.44%)
TSLA volume 2.2M shares
SCTY 22.05, down 0.31 (1.39%)

 

[Papafox]

Today was a clear short attack to test the resolve of longs with SP below the 220 support level. The deep dips and partial near-recoveries are the fingerprints of short selling. At one point the stock recovered to 217, but continuous short selling to keep it below 217 in a horizontal movement allowed further decline later in the day.

The good news is that the shorts are limited in the number of days during which this type of selling activity can take place. Vgrinshpun reports that available short shares declined by more than 50,000 today at Fidelity. There was no substantial news today and broader markets were up, which points to selling by shorts as the primary explanation for today's decline in SP.

With production ramped up, demand holding, and Model 3 and gigafactory progressing on schedule (as far as we know), there is no reason for longs to jump out of the stock and so we do not see the panic selling by longs that took place in previous shorts-induced price declines. As long as longs buying in temper the effects of the short selling, there are real limits to how far down the short selling can bring the SP before a reversal takes place and longs start picking up shares at bargain prices.

Conditions:
Dow up 108 (0.58%)
NASDAQ up 13 (0.26%)
TSLA 215.20, down 4.79 (2.18%)
TSLA volume 3.3M shares
SCTY 21.46, down 0.59 (2.68%)

 

[TMSE]

View attachment 192059

Today was a clear short attack to test the resolve of longs with SP below the 220 support level. The deep dips and partial near-recoveries are the fingerprints of short selling. At one point the stock recovered to 217, but continuous short selling to keep it below 217 in a horizontal movement allowed further decline later in the day.

The good news is that the shorts are limited in the number of days during which this type of selling activity can take place. Vgrinshpun reports that available short shares declined by more than 50,000 today at Fidelity. There was no substantial news today and broader markets were up, which points to selling by shorts as the primary explanation for today's decline in SP.

With production ramped up, demand holding, and Model 3 and gigafactory progressing on schedule (as far as we know), there is no reason for longs to jump out of the stock and so we do not see the panic selling by longs that took place in previous shorts-induced price declines. As long as longs buying in temper the effects of the short selling, there are real limits to how far down the short selling can bring the SP before a reversal takes place and longs start picking up shares at bargain prices.

Conditions:
Dow up 108 (0.58%)
NASDAQ up 13 (0.26%)
TSLA 215.20, down 4.79 (2.18%)
TSLA volume 3.3M shares
SCTY 21.46, down 0.59 (2.68%)

50K decline in available short shares isn't much compared to today's volume of 3.3 m shares, it is less than 2%. How do we conclude that net short selling is the reason for fall today?

 

[ggr]

50K decline in available short shares isn't much compared to today's volume of 3.3 m shares, it is less than 2%. How do we conclude that net short selling is the reason for fall today?

Fidelity is only one broker, and not even a particularly big one at that. I'd guess about 5-8% of todays sales were shorts, and that's enough to make some longs get fed up and sell too. Personally, I'm encouraged that the volume is picking up again.

 

[Papafox]

When longs are selling, you don't normally see the quick dips and near-recoveries. Such up and down trading is more indicative of a tug-of-war with shorts trying to maximize the drop when they sell into a new position and longs bidding the price back up quite a bit shortly thereafter. When longs are selling, such as after bad news, you don't see nearly so much up and down movement. It's far from a linear drop, but it is not so up and down as this.

Fidelity is a good-sized brokerage and if shorts borrowed 50,000+ shares today, one could imagine at least 200,000 short shares systemwide being put into play today. That's less than 10% of total trading and ggr's numbers may in fact be pretty close, but 200,000 shares sold in big lots that bring steep downward spikes can indeed move the SP considerably. An interesting exercise is to go to the NASDAQ's real-time TSLA page and click by the minute on the various dips that took place throughout the day and see the volume for that minute. On a slow day, even 10,000 shares sold can create a nice dip, if timed right. You also have algobots that jump in and sell when they see selling, so you have a magnified effect of short-selling.

One reason I suspected short-selling behind the dip today is that I was on guard about it before trading started. On Friday we closed a penny below the $220 support level and I expected either a push back higher into the green by longs or a short selling push that would probe to see how far below $220 TSLA could be pushed today.

And so, my premise is that with the shape of the trading chart today (lots of deep dips and then near recoveries), with the Fidelity drop in available shares to short, and with TSLA teetering right on the edge of the $220 support level causing shorts to have a real incentive to push the SP lower today, I believe that short-selling was the primary reason for the loss of value in TSLA today.

 

[GoTslaGo]

@Papafox,

FWIW (since I am a noob at this) I agree with your hypothesis that the shorts are trying to push the SP down. IMHO, there was a tempting target available: the 200 day MA.

Just finished reading @Curt Renz 's primer on charting and couldn't help but to notice on Friday that the SP was just above the 200 MA. I'm sure others noticed it as well. Since lot's of folks use technicals to make trading decisions it was probably too tempting a target not to go after.

Quick article on NASDAQ:

Tesla Motors Breaks Below 200-Day Moving Average - Notable for TSLA