Papafox's Daily TSLA Trading Charts

[Papafox]

Lots of issues were in the stock price mix today including in-the-dumpster macros, realization that Tesla's exposure to the Mexico tariffs is very light compared to other auto companies in U.S., China M3 prices announced and pre-orders begin, and finally a day without a notable analyst downgrade (did the shorts get the sequencing wrong)?

Despite the considerable pressure from the macros, Tesla managed to break free of the multiple mandatory morning dips (see the icicles?) and find green. It wasn't easy. Look at the multiple pushdowns as TSLA approach the red/green line. When TSLA finally broke through, the shorts were apparently careful to chop off the climb just below 190 to avoid a further rally.

If you haven't seen it yet, here's an excellent CleanTechnica article on Tesla by Michael Grinshpun.

The NASDAQ opened quite low and peaked in the red at 11:30am and 1:45pm before heading down again

Comparing the NASDAQ chart to the TSLA chart, you can see that there was moderate correlation between the two, but generally the NASDAQ made relatively small changes while the market magnified these gyrations with TSLA.

Notice that when volume is relatively heavy in the morning and TSLA has shrugged off the MMD, it often has the ability to run upward and break into the green. At such times there is more worry about missing the bounce with Tesla than holding through a further dip. As the low volume afternoon hours approach, any excuse will likely lead to a short-seller-induced pushdown. In today's case, TSLA was trading quite a bit better than the macros going into the afternoon. The pushdown brought TSLA about even with the NASDAQ's decline, which made the push easier for the shorts. Beyond that number, the pushdown would have required more resources.

How do I know that the shorts have been manipulating TSLA hard this week? One indication is the icicles, the capping, and the low volume pushdowns into close. Another is the high volume in the final minute of market trading when short-selling manipulators can cover without affecting the stock price. Today's number was an enormous 524K shares traded in the final minute. We saw percent of selling by shorts run quite a bit higher today than yesterday, suggesting more manipulative selling and immediate covering, and we saw (according to Dusaniwsky below) over a million shares of TSLA added to short interest in the past few days.

What's particularly interesting about the chart above is the quantity of short interest growth in the past few days when compared to the very mild decrease in the stock price over the same days. Interpretation? the shorts were trying like the mischief to push TSLA down and weren't getting much for their efforts. The bad news is that some of the shorting might just be a reasonable response to deteriorating macro conditions. The reasons for TSLA's resilience?
* Realization by some investors that the sugar-storm of media negativity and analyst negativity in past couple of weeks may indeed be a distortion of reality.
* A belief by many that Tesla's support at 180 will mark the bottom of the dip and a recovery can begin at or above this number

I tend to see the battle with the shorts as winnable at this point, but the boogyman continues to be macros and the carnage that new statements by the POTUS can have on the market. One needs to weigh both factors in investment decisions.

Short percentage of TSLA selling jumped higher today as shorts scrambled to push TSLA down with at least as much percent dip as the broader markets. Shorts were tagged with 45.5% of TSLA selling

Looking at the tech chart, you can see TSLA failing to establish a bottom yet but often running to or above 190 at some point during the day. Fear of missing the bounce seems to generate steeper climbs than fear of further drops tends to generate steep dips. At some point, after sufficient good news, TSLA could well break free of the capping and make a run for high numbers. We need that news, however.

For the week, TSLA closed at 185.16, down 5.47 from last Friday's 190.63. That's a whole lot better than last week's 20.40 drop and with the full-court press of the media, certain analysts, and the shorts, it takes a week such as this one to pave the way for a bottom. Enjoy your weekend, shake off the stress, and enjoy life for a few days. You've earned it.

Conditions:
* Dow down 355 (1.41%)
* NASDAQ down 115 (1.51%)
* TSLA 185.16, down 3.06 (1.63%)
* TSLA volume 10M shares
* Oil 53.50
* Percent of TSLA selling tagged to shorts: 45.5%

 

[Papafox]

Today the Dow ended flat but the NASDAQ traded down 1.61% in a rolling dip to close, pulling TSLA down with it. The DOJ is looking at Apple and other big tech and internet companies to see if anti-trust issues need to be explored, and that focus sent a shiver through the NASDAQ today. If you compare TSLA's trading to the NASDAQ's, you'll see that the roller-coaster ride showed lots of correlations between the two.

Also hurting TSLA today was a Bernstein note (CNBC version here) that basically said that nobody would want to pick up Tesla and that if Tesla went out of business life would get better for the European auto makers. This is the same kind of lame fear tactics and nonsense that Adam Jonas has been selling lately, but it's good for knocking a couple points off the stock price and so they do it. Here's a free piece of advice for the Bernstein analyst. Maybe, just maybe, one of those car companies that is going to be paying Tesla billions of dollars for EV credits might find some use for a positive cash-flow automaker with huge demand. Nah, let's not tell him and make him figure it out on his own.

With such a toxic macro and news environment today, we had a chance to see what support existing in the vicinity of 180. Initially we saw a bounce near 181 in the morning, but most of the support tended to be around 178, the number that Option_Sniper gave. Will 178 hold? It's really an academic question right now because if the shorts want to take it out badly enough they will. On the other hand, there's no guarantee they can hold it below that number for any length of time, so I think we should not be expecting solid support numbers that can't be broken, but we may instead see a persistent return to a number when knocked below, such as what we saw not long ago with 190.

The NASDAQ closed down 1.61% today on fears of DOJ anti-trust scrutiny on Apple and possibly on other tech/internet companies

In other news:
* Cornerstone Macro's chartist Carter Worth appeared on CNBC this afternoon and said that the technicals have gotten so bad with TSLA that this might actually be the time to cover short positions or buy into the stock because a u-turn may soon be in order. He says his decision is 100% based on charts and nothing on fundamentals. Naturally, the CNBC gang called him over to the desk so that they could all downtalk Tesla and say the stock is going to 150, not going up. After all, it's right there in the bear trader's book of dirty tricks that once a stock dips into the vicinity of a previously-mentioned target for a dip, it's necessary to name another, lower one, so as to keep the fear of further decline intact.

Meanwhile, InsideEV starts reporting May EV sales tomorrow and it's possible Tesla will be covered. There's a reasonable chance that the numbers will surprise to the high side because Q2's deliveries are reported by many as being very good in North America and inventory is reported as down significantly by TMC members visiting individual delivery centers.

We've reached 180, so when does TSLA bottom out? Hopefully soon, but the real answer is when fear of missing the bounce becomes stronger than the fear of further falling. With each new low, the former gets more likely and the latter becomes more benign. Macros may influence the timing. Some good news of substance may be the catalyst, or it may simply be a run upwards that the shorts can't cap and the stock gets away from them. Tick, tick, tick.

Looking at the tech chart, you can see somewhat elevated volume, but nothing particularly high, suggesting that TSLA was mostly responding to the broader market today.

Conditions:
* Dow up 5 (0.02%)
* NASDAQ down 20 (1.61%)
* TSLA 178.97, down 6.19 (3.34%)
* TSLA volume 12.7M shares
* Oil 53.12
* Percent of TSLA selling tagged to shorts: 40%

 

[Off Shore]

* Oil 53.12

Wow!

 

[Papafox]

Very excited to see what happens Tuesday morning. Here's the TMC post where we see Adam Jonas's U-turn on Tesla demand this evening. Then there was the Carter Worth appearance on CNBC this afternoon where he said it's time for shorts to cover and longs to buy. These two factors might be enough catalyst, when combined with 180ish pricing, to get this stock turned around at last. Fingers crossed.

 

[Antares Nebula]

@Papafox

And this makes three:

NYU Professor and former bear, Aswath Damodaran going long at 180.
Tesla's Travails: Curfew For A Corporate Teenager? - Tesla, Inc. (NASDAQ:TSLA) | Seeking Alpha

 

[PeterJA]

Very excited to see what happens Tuesday morning.

Good call. I wonder if this was the bottom or if there will be a double bottom at 180.

 

[sunny-value]

The last shorts to add are the weakest hands. If bulls have dry powder left, short covering from the weak hands and robots should propel us over 200 this week. This kind of short interest is basically a coiled spring. Even though I was out from my long-term position last summer and started reinvesting my money I could not resist some calls at 200. I think we will rally hard now into at least investor day, maybe into earnings. It was just too much negativity from everyone all around. When even the bears start saying "maybe this has gone too far too soon" (not counting the crazy TSLAQ crowd) and every bull is holding onto their chair with white knuckles is when you need to flip your mental switch. I think it will not go lower unless Q2 is really crappy.

 

[Navin]

The last shorts to add are the weakest hands. If bulls have dry powder left, short covering from the weak hands and robots should propel us over 200 this week. This kind of short interest is basically a coiled spring. Even though I was out from my long-term position last summer and started reinvesting my money I could not resist some calls at 200. I think we will rally hard now into at least investor day, maybe into earnings. It was just too much negativity from everyone all around. When even the bears start saying "maybe this has gone too far too soon" (not counting the crazy TSLAQ crowd) and every bull is holding onto their chair with white knuckles is when you need to flip your mental switch. I think it will not go lower unless Q2 is really crappy.

One lady winking at you at the bar doesn’t guarantee you a crazy wild night. Let’s see how next several days play out.

 

[anthonyj]

One lady winking at you at the bar doesn’t guarantee you a crazy wild night. Let’s see how next several days play out.

Elon Musk on Twitter

 

[Papafox]

Congratulations longs, we may have found a bottom to this deep dive. As @Navin says, let's see what happens over the next few days. So far it's looking very good, though. Tesla benefited from a combination of some heavyweights reversing their positions and suggesting Tesla was ready to climb again plus an unusually bullish macro day. The Dow and NASDAQ were both up more than 2% on a comment from the Feds that they might consider a rate cut.

Although percent of selling by shorts was unusually low today, that's not to say that they weren't trying their mischief at times. Look at the slight dip after market open. That was a gift for those of you who had dry powder and wanted to jump back into the game. With the good TSLA news and with the macros already well up, it was an unusually slow start to what looked to me yesterday as a likely big day for TSLA longs.

Notice, too the level trading just above 190 in early afternoon. Although it could be traditional resistance (lots of investors having sell orders in at 190, it could also have been a feeble attempt by some shorts to contain TSLA so that it didn't close above 190.

Notice, too, how volume declined throughout the day. The real tug-of-war between bears and bulls was in the first hour and a half of trading. After 2pm volume really faded, but the strong macros and good TSLA news just enabled TSLA to keep finding higher prices. The final bump right before close was actually a reflection of the NASDAQ showing similar strength into close.

Sometimes the shorts will concede defeat for a day, let the SP run up, then revisit within a day or two should the macros turn red. We'll see if percent of selling by shorts picks up.

In after-hours trading, TSLA gained close to another point, suggesting that some buying pressure is likely to carry over to tomorrow.

The NASDAQ closed up 2.65% today

The big news for today was that InsideEV released their May EV sales numbers and Tesla is looking very good so far in U.S. deliveries.

Model 3, S, and X are all looking much stronger than in the 2nd month of Q1, February. Further, I suspect we're going to see a strong June worldwide as several ships land in Europe over next couple of weeks, Canada, particularly B.C., is red-hot in M3 sales, and the raven-equipped S and Xs are now rolling off the production line at a good pace (if you consider how many S and X delivery threads customers have been getting their vehicles over the past two weeks).

Shorts were tagged with only 34% of TSLA selling today. Trying to manipulate TSLA when both the macros are so strong and TSLA news is so good remains an exercise in futility.

With short interest of more than 39 million shares, the spring is indeed compressed and as the stock price rises higher we'll get some help in the climb from shorts jumping ship. The biggest problem right now in dislodging the shorts is that they're still up $4.5 billion for the year and it may take a while to convince large numbers to close. OTOH, carrying a large number of shorts into the Q2 ER and then surprising with better than expected financials combined with positive guidance could induce a big climb as they scramble to get out.

I'm showing a tech chart for all of May so that you can see just how relentless the downward pressure has been this month. Today's big climb broke that momentum. Volume today was 13.5M and I'd love to see higher volume to kick off a stronger climb. Also, check out the upper bollinger band around 256. We certainly have lots of room to run.

Conditions:
* Dow up 512 (2.06%)
* NASDAQ up 194 (2.65%)
* TSLA 193.60, up 14.63 (8.17%)
* TSLA volume 13.5M shares
* Oil 53.05
* Percent of TSLA selling tagged to shorts: 34%

 

[Papafox]

 

[P3D+]

Or this wildly contradictory analysis...

Tesla Stock Might Take Off, but It's Not a Buy, Analyst Says -- Barrons.com
DOW JONES & COMPANY, INC. 7:43 AM ET 6/4/2019
Tesla stock could rise 25% from current prices -- but that doesn't make it a buy, according to an analyst who warns a "wide range of complex events" could move the stock.

Tesla stock has slid 46% in 2019 through Monday's close. Morgan Stanley's Adam Jonas reiterated an Equal Weight rating and a $230 price target, below FactSet's roughly $286 average.

Jonas -- who, you might recall, floated a $10-per-share worst-case scenario for the stock last month -- sees "high levels of volatility between our $10 bear case and our $391 bull case."

 

[sunny-value]

Or this wildly contradictory analysis...

Tesla Stock Might Take Off, but It's Not a Buy, Analyst Says -- Barrons.com
DOW JONES & COMPANY, INC. 7:43 AM ET 6/4/2019
Tesla stock could rise 25% from current prices -- but that doesn't make it a buy, according to an analyst who warns a "wide range of complex events" could move the stock.

Tesla stock has slid 46% in 2019 through Monday's close. Morgan Stanley's Adam Jonas reiterated an Equal Weight rating and a $230 price target, below FactSet's roughly $286 average.

Jonas -- who, you might recall, floated a $10-per-share worst-case scenario for the stock last month -- sees "high levels of volatility between our $10 bear case and our $391 bull case."

Well their trading desk which sell both puts and calls and their brokerage which gets commissions on all stock transactions, long or short, all make more money the more trading there is. That and underwriting fees is why they love Tesla.

 

[PeterJA]

Maybe Trump's new threat about Mexican tariffs will cause another dip tomorrow.
Trump Says No Deal With Mexico Reached as Border Arrests Surge

 

[samk579]

Maybe Trump's new threat about Mexican tariffs will cause another dip tomorrow.
Trump Says No Deal With Mexico Reached as Border Arrests Surge

Is it because of macro or are Tesla parts make in Mex?

 

[Papafox]

Today the macros cooled a bit but remained green, and so did Tesla. We again saw correlation between the NASDAQ chart and the TSLA chart, but with some important differences. For example at 12 noon, the NASDAQ had taken a small dip but would climb noticeably higher by 1:30pm. Looking at TSLA, though, you can see what looks like a line drawn through 196 and capping to keep TSLA from exceeding it. Fortunately, the cap failed with about an hour of market trading left, and TSLA closed above the forbidden number. TSLA did not enjoy the robust climb of the NASDAQ in the final 15 minutes of market trading, though, and I lay this shortfall on gaming by the shorts. If so, you would expect to see substantial trading in the final minute of market trading as shorts covered their daily manipulations, and so it was, with no less than 414,000 shares trading in the 4:00pm minute. Also, the percentage of selling by shorts run up today, likewise confirming the mischief underway. Shorts are likely NOT increasing short interest at this time. Instead, we probably are seeing the beginnings of covering. What we are seeing, though, is some elevation in the manipulations by sell/buy, sell/buy daily shortseller manipulators, and the second chart below supports this theory.

The NASDAQ gained 0.64% as macros responded favorably for the second day in a row to Fed hints of rate cuts if they become needed.

In news today, CNBC has just reported on what we at TMC have been talking about for the past 4-5 weeks, which is that Q2 19 looks like it is going to snuff out the rumors that Tesla lacks demand. In this article they cite both Morgan Stanley and JMP comments.

Looking year over year, Tesla deliveries are more than 72% higher than the same month last year. Keep in mind that about a week ago Adam Jonas was describing Tesla as no longer a growth story. Hello?

Overall, I think we can expect the manipulations of the shorts to pick up as they try to defend against a climb over 200. Most are still in the money with their bets and cocky enough to expect TSLA to fall to their mischief. Personally, I think next week's shareholders' meeting has the potential to be very positive if Elon takes the time to dispel rumors and maybe even give shareholders a look at what Tesla has planned for Model Y, Semi, Tesla Energy, and especially how the battery cell side of the equation will be evolving in the coming year to take advantage of Maxwell Technologies. Rather than hearing it from Carsonight, we need to hear from someone at Tesla how well the Grohmann battery machines are working at the moment. It's time to serve some steak to the shareholders.

Shorts were tagged with 42.5% of TSLA trading today, noticeably higher than yesterday's and for good reason

Looking at the tech chart, you can see the start of a reversal continuing. Breaching 200 would be an important psychological triumph.

Conditions:
* Dow up 207 (0.82%)
* NASDAQ up 48 (0.64%)
* TSLA 196.59, up 2.99 (1.54%)
* TSLA volume 13.0M shares
* Oil 51.49
* Percent of TSLA selling tagged to shorts: 42.5%

 

[Wado]

Sure like seeing Tesla pop back up but I fear this market bounce will have little stamina as the real fundamentals that were hurting the market have not really changed.

 

[⚡️ELECTROMAN⚡️]

Sure like seeing Tesla pop back up but I fear this market bounce will have little stamina as the real fundamentals that were hurting the market have not really changed.

Is your name Debbie? Or maybe Bob?

 

[Wado]

Is your name Debbie?

LOL I try to remain hopeful but my money is sidelined for the time being.

 

[PeterJA]

Is it because of macro or are Tesla parts make in Mex?

Both, I think. I read that Tesla gets some parts from Mexico, although Tesla is less vulnerable to tariffs than automakers that assemble in Mexico.

Sure like seeing Tesla pop back up but I fear this market bounce will have little stamina as the real fundamentals that were hurting the market have not really changed.

The BS about Tesla's demand is changing, as Papa mentioned. That BS was part of what hurt TSLA.