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Papafox's Daily TSLA Trading Charts

Discussion in 'TSLA Investor Discussions' started by Papafox, Apr 15, 2016.

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  1. Papafox

    Papafox Active Member

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    #2481 Papafox, May 18, 2019
    Last edited: May 18, 2019
    may17chart.JPG
    Friday was indeed ugly, but none of us should have been surprised after the media spun Elon's email to employees in ways that made Tesla look like it is in a desperate situation. Volume picked up to 17.4 million shares today, about double the usual volume. Such an increase indicates that what we saw today was mostly the work of some longs who worked up a dread over the email. Of course the shorts did everything they could do to intensify the drop. We saw lots of trading in the first and last minute of the market day with 327K shares trading hands at 9:30am and 525K shares trading hands at 4:00pm. The end of day is a time when covering for daily manipulations is popular because the buying does not change the value of TSLA.

    may17nas.jpg
    The NASDAQ traded green for about half an hour on Friday but did a swan dive at 3pm for a loss of 1.04%

    Comparing TSLA to the NASDAQ, you can see that so much pressure had been applied to TSLA already in the day that the NASDAQ's big tumble at 3pm had only a mild effect upon TSLA.


    may17short.jpg
    Official FINRA percent of TSLA selling by shorts was 43%, but evidence suggests the big push-down starting about 2pm (1 hour before the NASDAQ drop) was shorts selling to take advantage of lower volumes, and so I suspect shorts had a bigger hand in the drop than the FINRA numbers indicate. Naturally, volumes increased as the selling intensified, but by then the trend was working in favor of the bears.

    The reason the broader markets turned negative on Friday was because China withdrew from negotiations on the tariffs. Those of you who read this article posted a couple days ago by @DaveT know that although the Xi regime may have been negotiating honorably with the U.S., the party has the final say on whether such an agreement moves forward, and both the hard-liners in the party and those segments that would lose government subsidies protested strongly and insisted on an agreement that had as much good in it for China as bad. In order to give a balanced agreement, Trump is likely to impose the full range of tariffs on China in coming months and China will retaliate both with its own tariffs and by buying fewer U.S. treasury bonds. Only when the pain is severe in China and the U.S. is dangling the carrrot of non-tariff access once again to the U.S. markets will the party likely agree to the type of deal that both sides had once thought was close. In other words, Trump would have to first show that he can impose such tariffs and that they would be tolerated by the U.S. population. With consumer confidence at a high here in the U.S., the country is positioned well to weather a trade war. Look for a long, drawn-out tariff war as a likely scenario. Tesla's GF3 in Shanghai will work around the tariffs likely to be imposed by China this year, but as Trump imposes the full range of tariffs, the Chinese economy will suffer, and that lower economic output will affect auto sales. Fortunately, young Chinese who hold good jobs and wish to buy cars will still seriously consider a Tesla Model 3 purchase, since the lottery system for ICE license plates in China is too expensive and contains uncertainties.

    Another story that has hurt Tesla this week was the story that Trump will be delaying any duties for another 6 months on foreign vehicles entering the country (aimed primarily at European and Japanese carmakers). If there's a ray of sunlight in this week's news, it's that a much more onerous tariff that the Trump administration might impose has been delayed, presumably because of the heating tariff battle with China and a desire to avoid a trade war on two fronts simultaneously. With any luck, cooler heads will convince Trump that the duty on imported vehicles will not generate the intended effects. Rather than driving buyers toward U.S. made vehicles, the more likely scenario is that buyers looking for foreign vehicles will just delay their purchases until the duty goes away, thus harming U.S. automakers more than helping since presumably other nations would impose similar tariffs on the export of vehicles from the U.S.

    may17tech.JPG
    Looking at the tech chart, you can see that TSLA descended well below the lower bollinger band on Friday. That band was at 216.35 at day's end. Now look on the trading chart and you'll see that TSLA was trading in the vicinity of the lower bb for much of the day until the strong push-down effort came at about 1:30pm, likely initiated by shorts. It's possible that TSLA could recover to the lower bb on Monday if macros are positive, but it's also possible with the steep downward slope of the lower bb that it just keeps adjusting itself to whatever the price of TSLA is.

    Expect the shorts to try aggressively to see how far they can run with this particular departure from a hint of a bottom (in the 231 area). They're trying to activate as many stop-loss switches and trigger as many margin calls as possible, especially the fabled margin call on Musk's loan from Goldman. It'll be nice to put an end to speculation on that matter. We need to find a bottom that sticks.

    BTW, why do billionaires like Ellison and Musk not sell shares and instead live on borrowed money? The answer is twofold. First, they like to maintain as many shares and as much control as possible of their companies. Secondly, there's no tax on borrowed money, but there are taxes on selling shares for a profit.

    This week we saw a significant drop due to negative macros (primarily because of China trade war news) on some days and dread generated by Elon's email to employees. On Friday, TSLA closed at 211.03, down 28.51 from last Friday's 239.52.

    may17maxwell.jpg

    The good news this week was that the Maxwell deal closed. Despite the short-term pain for TSLA shareholders, the long term still looks promising for Tesla. Consider watching this video from Hyperchange or refer to the slide above to review the benefits of the acquisition.
    * Right now Tesla cells have an nergy density of about 250 Wh/kg, but the dry battery electrode process at Maxwell brings that density up to 300Wh/kg and the companies see a path the 500 Wh/kg. In other words, we could see double the energy density in future cells and batteries.
    * Battery life might be doubled with the DBE technology, leading to batteries that last a million miles
    * By eliminating the drying ovens, solvent reclaiming efforts and making other changes, Tesla could potentially gain 16 times the cell output from the same factory space. Additionally, battery costs could drop 10-20%, which is huge.
    * Cobalt, solvents, and other materials that can harm the environment would be eliminated

    Presumably, Tesla has already been testing this battery technology and setting up sample production capabilities for some time. Thus, the technology may be deployed at Tesla much quicker than analysts and investors expect.

    The bottom line is that although this has been a dismal trading week for TSLA, the company has actually made strides which will increase its lead over other competitors in the EV vehicle market. The not-so-distant future looks bright for Tesla as Model 3 and Semi come into production next year and cell production becomes less costly and produces a noticeably better product. Keep the good news in mind. Enjoy your weekend.

    Conditions:
    * Dow down 99 (0.38%)
    * NASDAQ down 82 (1.04%)
    * TSLA 211.03, down 17.30 (7.58%)
    * TSLA volume 17.4M shares
    * Oil 62.76
    * Percent of TSLA selling tagged to shorts: 43%
     
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  2. Papafox

    Papafox Active Member

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    Correction in last paragraph: As Model Y and Semi come into production...
     
  3. pdq

    pdq Member

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    Papafox:

    As of this Monday morning, TSLA broke below 200, and then recovered. As I write this, it's at 203. From everything that I can see it isn't because of a long, highly technical set of reasons, or because of the short sellers. Rather it's the Wall Street analysts (i.e. not traders) who are getting scared of TSLA, don't think that they'll make their numbers in the 2nd half and think that instead of robotaxis, insurance, etc., that as one analyst said, Elon should be "laser focused" just on TSLA.

    The fact that he issued the employee memo saying that the recently received $2.4Billion was only enough to last them 10 months didn't settle anyone's concern about their cash burn rate.
     
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  4. Papafox

    Papafox Active Member

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    I was disappointed with the Daniel Ives of Wedbush comments. He really seemed determined to move the stock price today with his negative comments and thereby gain some credibility. On one hand, he's right: Wall Street primarily wants to see good delivery numbers and gross margins in Q2 and it's not concerned about full self driving progress at the moment. On the other hand, who is to say that Elon isn't already doing everything he can to help with the delivery numbers? To assume that because he personally is putting in more time with the FSD effort does not mean that Tesla has lost focus on Q2 delivery numbers. Not at all. Something the analysts fail to understand is that progress with FSD would become not only a catalyst for future demand of Tesla vehicles, it would also become a lever for increasing gross margins on the vehicles. If you add another $6K to a $40K vehicle that vehicle's GM is bumped up by 15 percentage points, Teslas don't need to be making money hauling people around in Uber-like scenarios for autopilot and the FSD upgrade to positively affect demand and margins. I think we're going to see the safety of autopilot-enabled Teslas start to improve significantly when the new hardware and neural net are enabled. I think this significant improvement in highway safety is going to be part of the reason Tesla Insurance will succeed. Bottom line, Elon is connecting the dots and Ives isn't.
     
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  5. Ben D

    Ben D Member

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    For analysts to suggest that Tesla stop innovating and just produce a few static product lines is ridiculous. So short sighted...
     
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  6. Mars ☰mperor

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    Connecting the dots.

    That's exactly what is happening. Let's hold on tight.
     
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  7. Papafox

    Papafox Active Member

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    #2487 Papafox, May 20, 2019
    Last edited: May 20, 2019
    may20chart.JPG
    Well, you have to give those shorts credit for trying. Selling that exceeded 100K shares in one minute brought about an early mandatory morning dip, and a few additional selling streaks added icicles to the day's trading. Even though the NASDAQ opened low and stayed low, TSLA started a nice recovery until about 2pm when (apparently to my eyes) the shorts tried a systematic walkdown of the price into close in order to exaggerate the NASDAQ's slow descent, but by 3:15pm or so the NASDAQ turned higher and TSLA buyers bid the price up into close, thereby thwarting the plan. As evidence of a "systematic walkdown" of price, I suggest you compare the roughness of the trading leading up to 2pm to the rather smooth and predictable descent that followed.

    In after hours trading, the big spike at 5:16pm was a pre-arranged trade at the market closing price. What's notable is the quantity of these type of trades recently. One possibility is that some institutional investors are decreasing TSLA holdings while others are increasing.

    Three improvements in the trading today (compared to yesterday) were the rebound after the MMD, the defeat of the short's walkdown into close, and a smaller decline in after-hours trading suggests TSLA is getting closer to a turnaround in this descent.

    may20nas.jpg
    The NASDAQ lost 1.46% today, but the Dow was down only 0.33%

    Much of today's weakness in TSLA can again be attributed to the NASDAQ's losses, but other factors were involved too. The media was really on a roll today, hitting TSLA with about every negative story it could conjure up. Particularly distasteful were the stories which described TSLA being down both because of concerns about Musk's priorities as well as the NTSB results from an autopilot accident that were announced days ago. The real bottom-feeders of the media world are really trying to milk that NTSB report for all it's worth.

    News:
    * One-time bull Daniel Ives of Wedbush was covered in this CNBC story saying that Musk needs to concentrate on Model 3 deliveries and not be distracted by all these other 'sci-fi projects'. See my comments about Ives in the previous post today.

    may20short.jpg
    Finra sources show that 41% of TSLA selling was tagged to shorts today. The robust MMD and the exaggerated walkdown of the stock price after 2pm make me inclined to believe the shorts were far more involved today than that number indicates.


    may20tech.JPG
    Looking at the tech chart, the SP is about $5 below the lower bb today, showing how little support you can expect from the lower bb when it is positioned at such a steep angle downward. Nonetheless, it's unusual to see the SP trading outside the bollinger bands for more than 2 days in a row, so a return to within the bb may be in order soon. Also, although the SP descended well below 200 today, it didn't spend much time there as it was being purchased by longs. Let's see if 200 can develop into support tomorrow.

    Overall, Tesla is executing well enough so that this current stock price is quite inappropriate. Whether we go down further or see a nice spring back tomorrow is anyone's guess, but macros will likely play a role. Hopefully, Wall Street will come to terms with the new reality in trade between the U.S. and China. The Dow showed only a minor drop today. Let's hope the NASDAQ follows suit tomorrow. As painful as these deep dips are, if you truly believe that Tesla will continue to execute well in the coming year, then these dips are an opportunity to make some nice returns if you have dry powder to deploy. Since TSLA could turn around quickly, I recommend keeping a sharp eye on this stock over the next few days if you're planning to acquire more. Short interest has not changed considerably in the last few days, which suggests this downward catalyst could soon be over. Improved macros might be all TSLA needs to end this dip.

    Conditions:
    * Dow down 84 (0.33%)
    * NASDAQ down 114 (1.46%)
    * TSLA 205.36, down 5.67 (2.69%)
    * TSLA volume 20.5M shares
    * Oil 63.41
    * Percent of TSLA selling tagged to shorts: 41%
     
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  8. smorgasbord

    smorgasbord Active Member

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    I agree Mr. Market didn't get Autonomy Day*.

    But, even if you believe Musk's timeline (which face it, nobody does, probably not even Musk himself), we're still talking 6 quarters before FSD becomes any sort of additional demand lever of gross margin improver. Musk's recent internal email was trying to scare the troops with the 10 months we run out of money at Q1 run rate (which I'm sure they're already better than today), but the point remains that Tesla needs to deliver 300K vehicles in 3 quarters this year, and the first of those quarters is already half done. Posts here are showing an "optimistic" case of Q2 delivering only about 85K vehicles, which means Q3 & Q4 need to be close to 110K vehicles, maybe more. And, all this is assuming that SR+ actually has a decent margin - for which there is reason to doubt.

    While I don't dismiss what Musk is doing as "Science Projects," I do feel that Tesla needs to deliver lots of high quality cars this year. The long term future is indeed bright, but they can't run out of money in the meantime.


    * - Autonomy Day was really quite impressive, and I thought Karpathy in particular made an extremely compelling case for why you need to not just get a static 3D picture of things around the car, but to interpret what/who those things are and know how they might move, and predict how they probably will move. Lidar doesn't help with any of that. And since that understanding is required if with lidar, there's not much point in putting additional expensive hardware that only gives you static 3D, since by the time you've figured out what's there and what it's likely to do, you already have more than good enough 3D (not to mention the fog, rain, snow issues of lidar).
     
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  9. Papafox

    Papafox Active Member

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    I forgot to mention that Oppenheimer analyst Colin Rusch bravely went on CNBC today and stated that Tesla has a chance of meeting its guidance this year. He says demand is not the problem and that the Maxwell acquisition will result in a 20% reduction in the cost of batteries, which is huge.
     
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  10. pdq

    pdq Member

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    Papafox:

    Put TSLA aside for the moment and look at GE. Once a terrific company, but almost went bankrupt due to a CEO who started doing acquisitions all over the world that made no sense, sporting a big ego and taking on a lot of debt. There was no focus to his leadership, and to avoid bankruptcy, they gave him the boot. Their stock now is in the single digits and can't seem to go anywhere (disclosure: I bought GE when it went single digits and currently own it). The new CEO is doing the right things, selling off the acquisitions that are non-core, reducing debt, and doing other things to clean up the balance sheet but the stock price isn't soaring.

    Why?

    Because Wall Street analysts don't want promises, they want results. They want good numbers. They want solid performance and until then, GE stock will languish. Also, Wall Street does not have a long term vision on ANY stock -- they live and die quarter to quarter on every single stock out there which is what causes the huge swings in the markets. Watch CNBC and see what happens to any stock price if they beat or miss quarterly projections. They get punished or rewarded, quarter by quarter.

    Don't think that TSLA is being singled out by Wall Street. They are looking for TSLA to perform, the same way that they are looking at GE and every other company out there.

    I know that this post won't sit well with many, but being a former broker, there was a golden rule of "Don't love any stock". Stocks are a cold investment, not a mistress. If TSLA and GE start hitting their numbers and producing great results, Wall Street will love them, they will write glowing reports and the stock price will soar. It's the law of the jungle.
     
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  11. PeterJA

    PeterJA Member

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    How can they possibly run out of money when their capital raise two weeks ago was oversubscribed and their third Gigafactory is shooting up on Chinese money? This is a serious question, not rhetorical. If they needed more money, they would have raised more, and can do so in the future.

    Elon said they missed Q1 numbers because they couldn't get the number of batteries promised by Panasonic. He just didn't say it loud or often, maybe to avoid embarrassing Panasonic. And Panasonic said they are fixing the problem.

    Cathie Wood said most analysts don't know how to analyze this stock.

    I suspect she is right about many analysts, but I also suspect smart and powerful people know damn well that Tesla's problems are only temporary, but these people are milking the stock volatility for all they can get: kick Tesla when they're down and profit from the dip, while preparing to profit from the soar to come.
     
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  12. anthonyj

    anthonyj Stonks

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    No, they missed Q1 numbers because S/X
     
  13. Papafox

    Papafox Active Member

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    #2493 Papafox, May 21, 2019
    Last edited: May 21, 2019
    PDQ, I've been looking at your your most recent five posts. Here are excerpts.

    "The fact that he issued the employee memo saying that the recently received $2.4Billion was only enough to last them 10 months didn't settle anyone's concern about their cash burn rate."
    "...look at GE. Once a terrific company, but almost went bankrupt due to a CEO who"...
    "What worries me is their cash burn rate."
    "I got rid of that car (2015 P90D) and for the last year+ I've been driving a 2014 Mercedes E550, with their "Drivers Assistance" package equivalent to Tesla Autopilot"
    "But, I also avoid (investing in) companies like Tesla that gyrate violently... "
    "A bet, not an investment. Full disclosure -- I've traded TSLA, riding the violent gyrations."

    Every one of your most recent five posts spins a negative picture of Tesla and its stock. According to your posts, you no longer own a Tesla, you don't invest in Tesla but you trade in it to take advantage of its violent reversals. If you trade in TSLA but don't invest in it, I suppose that leaves shorting as an option. You may be a swing trader, but your negative opinions in the thread when TSLA is on the downswing are not appreciated. The main investment thread is open for your postings, but I would prefer for all of us to keep this thread mostly focused on the daily trading charts and I would appreciate PDQ's choosing another thread for posting opinions about TSLA. Sometimes it is appropriate to respond to something mentioned in the daily trading chart, but let's try to keep from straying too far like we've seen in the past couple of days.
     
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  14. PeterJA

    PeterJA Member

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    Yes, one contributor to the miss was the drop in S/X deliveries, maybe temporary because of the new refreshes and less depression of sales due to tax-motived pull-forward effect in the previous quarter.

    I think Elon's point was that Tesla could've made up the lost S/X revenue with Model 3 sales, except they couldn't get enough battery cells.

    Bears claim Tesla has a demand problem with Model 3, but that is clearly ignorance or disinformation. Model 3 sales are just getting started in many territories, because word-of-mouth advertising (due to cars on the streets) is just getting started and Gigafactory3 is not even finished yet.
     
  15. Papafox

    Papafox Active Member

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    may21chart2.jpg
    Today the NASDAQ had a very green day, which changed the dynamics of TSLA trading considerably. We have shorts with a vested interest in pushing TSLA down harder, even though news doesn't warrant such a decline. On top of the big dog shorts, we have individuals or organizations who have placed big put bets that will expire on Friday and later days as well. I think the goal of both groups (and I'm sure there's overlap) is to manipulate as necessary for TSLA to reach below the put values and enrich the holders of those puts. The only problem is:1) buyers have been picking up shares in great numbers in the $200 range (generating high volumes) and
    2) the NASDAQ turned green today

    Thus, the plan to push hard in pre-market trading and then sink the SP with a selling spree of over 100K shares in a minute at 9:34am failed and we saw a clear trend upwards (even though various short-selling icicles made the line very ragged.

    So, what happened after TSLA burst into the green early this afternoon? Shorts went to work selling as necessary and we saw a game of whack the mole extending into close. That's about three and a half hours of gyrations slightly above and below the red/green line. Is this normal behavior for any other stock? No, it's a manipulation technique used frequently at TSLA and the SEC is not willing to step in and make this a fair fight. TSLA was green 9 minutes before market close, but I think the goal of the shorts today was damage control in order to prevent TSLA from running too far into the green and inducing a buying frenzy. The secondary goal was to get TSLA to close in the red, and so TSLA departed from the green into the red in the final 8 minutes of trading.

    Ultimately, what you're seeing here is a war of attrition. You have big dog shorts who likely are also involved in the big put purchases that expire on Friday, and they're manipulating like crazy to push TSLA low enough for the Friday puts to pay off. On the other side, you have buyers (I'm guessing a lot of small retail investors) who keep sucking up shares near $200. Thus the volume has been very heavy the past few days and we've seen the dip go from a $17 plunge on Friday to a $5 drop on Monday, to a 28 cents drop today.

    may21nas.jpg
    The Nasdaq had a stable day, opening well in the green and closing up 1.08%, thus making the deep MMD of TSLA in early trading an untenable situation.

    In news today,
    * Electrek reports that Model S and X prices have been trimmed. The likely interpretation of the market would be that demand is still somewhat light for these vehicles and needed to be tweaked.
    * Adam Jonas of Morgan Stanley lowered his bear case price target from $90 to $10 for TSLA. This exact type of move was predicted a couple days ago by @Navin in this TMC post. TSLA entering a game of whack the mole for most of the afternoon was just as predictable, given the stock's strength to climb out of the deep mandatory morning dip. Even Jim Cramer, not exactly an ally of Elon Musk's, called Jonas's price target "really insane."
    * Fidelity increased their TSLA margin requirements for some customers today, likely sparking some margin calls. This type of action is the type of thing that helps the shorts push down further. If TSLA can hold the line at 200, though, the process can cease.


    may21openint.jpg
    Please take a look at the Open Interest and TSLA Options Volume charts above for options that expire on Friday. Even though the official max pain number is 220, if you move along the Open Interest chart you'll see that somewhere between 205 and 210 is the Friday price that splits the line the most equitably between calls and puts. A move into the 180s or 190s would require delta-hedging by the market makers to remain neutral. You can see that there are a ton of puts expiring Friday at 200, 195, and 190, which makes me suspect that we have lots of manipulations underway to try and reach those levels.

    Ultimately, the winner of this week's tug-of-war between shorts and longs will be determined by stamina as shorts lose money on their MMD attempts and longs buy up and profit from any failures of the shorts. Since we saw an MMD today that failed quickly, expect day traders to be standing by to buy the MMD tomorrow if it reappears like today's and if the macros are cooperative. That would spell more losses for the shorts team and a better chance of breaking into the green. What the shorts need is some bad news that is true, not FUD, or they need the macros to turn south. Let's see where the stalemate heads tomorrow.

    While the volatility of 2019 looks like it will be significant, the cost savings of the Maxwell acquisition, the beginning of manufacturing on the Semi and Model Y, plus deliveries of cost effective Models 3 and Y in China suggest that 2020 will be a good year. My personal plan is to restock my holdings close to this price point and plan to hold shares and leaps through 2020 to realize the upward movement in that year. When the manipulations get too crazy, consider stretching out your investment horizon. I suspect that shares and conservative 2021 leaps bought at these prices and added to my current holdings will serve me well come 2020.

    may21tech.JPG
    Looking at the tech chart, you can see that TSLA is trading now barely below the lower bb and will be within the lower bb by tomorrow if it holds its position. Tesla's ability to quickly bounce back above $200 for two days in a row adds credibility to $200 as a point of support.

    Conditions:
    * Dow up 197 (0.77%)
    * NASDAQ up 83 (1.08%)
    * TSLA 205.08, down 0.28 (0.14%)
    * TSLA volume 17.5M shares
    * Oil 62.98
    * Percent of TSLA selling tagged to shorts: 41%
     
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  16. N5329K

    N5329K Active Member

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    According to S3 Analytics, shorts have "earned" over $1 billion with TSLA so far in May. Why would they stop now?
    Robin
     
  17. Papafox

    Papafox Active Member

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    There are two basic ways for shorts to make money. One is for the stock price to fall while one is in an existing short position. The second is to carry out daily manipulations that are successful in depressing the stock price and which allow the manipulator to close out the day's shorting by covering at a lower price than the initial entry. The second type of shorting supports the first, but it cannot be carried out indefinitely when it costs too much money. The trend of today's trading was upward, which causes most all manipulations by shorts to leads to losses for the daily manipulations. Once the manipulations start failing, they cost money and eventually become unworkable.
     
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  18. Pras

    Pras Member

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    Have you considered that 23rd will be the end of 30 day periods for larger funds to have locked in the losses after earning? This may incentivize them to buy back in.
     
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  19. Highway2Heel

    Highway2Heel Member

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    Short week next week and EOM. Short weeks are rarely kind to TSLA...
     
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  20. Papafox

    Papafox Active Member

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    @Pras , many of us are unfamiliar with the process and the dates. If you have some link or links that can provide more information, it would be appreciated.
     

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