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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. Earthpower

    Earthpower Member

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    I think this is Papfox's channel only. Thanks Papafox!
     
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  2. avoigt

    avoigt Active Member

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    Papafox, can you give us your interpretation of Ihors graph?

    My question to him: Although borrowing fee does change daily do you have some kind of statistic that put the span of 1.1% - 1.5% we are in into perspective?

    [​IMG]
    Ihor Dusaniwsky‏ @ihors3

    Replying to @alex_avoigt @mthomasbenjamin and
    Attached is a graph of $TSLA's stock borrow rate (offer rate) versus shares shorted since 2016

    [​IMG]
    8:53 AM - 14 Jun 2019

    Ihor Dusaniwsky on Twitter
     
  3. Papafox

    Papafox Active Member

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    #2563 Papafox, Jun 15, 2019
    Last edited: Jun 15, 2019
    jun14chart.png
    Friday was another positive day for TSLA. Although the NASDAQ dropped about half a percent, TSLA rose about half a percent, thus showing considerable strength compared to other stocks on Friday. The issue wasn't so much a great demand for TSLA shares (volume was less than 8 million shares) but was instead a case of longs not being interested in selling at these prices.

    The disparity between longs and shorts continues to grow, which creates a very nice opportunity for TSLA appreciation if Tesla can indeed deliver in Q2. Shorts continue to believe that demand is a long-term issue for Tesla and that at current prices Tesla will lose money on every car sold. They're also betting on macro weakness, which is likely their strongest point. Longs, in contrast, believe that Q1 was a unique situation with expiration of full U.S. tax credits, typical Q1 weakness of EV sales (due to credits not coming until end of year tax time), and multiple one-time charges that will not be repeated. Further, longs realize there's lots of money coming to Tesla in 2020 with the Fiat-Chrysler and perhaps other deals for European carbon fees.

    Friday's trading answered the question, "what happens on a negative macro day to TSLA's SP?" The answer is that shorts at this point are not in control of the stock price because dreads have evaporated in long investors as more and more comments are made by Elon regarding the likelihood of a decent Q2.

    jun14nas.png
    The NASDAQ dipped 0.52% on Friday, making TSLA almost 1% stronger than the NASDAQ

    Notice how little correlation there was between the two charts on Friday. The NASDAQ's 11am dip was repeated lightly in TSLA's chart, but the afternoon dips of TSLA look like manipulations that were rejected, rather than reactions to news or macros. Someone was buying, however, and let's hope this is the beginning of a big dog starting to accumulate.

    In recent news:
    * Alexander Haissl of Berenberg reiterates $500 price target for TSLA . He is only eclipsed by Pierre Ferragu, who has a $530 price target for the next 12 months.
    * Washington Post hit piece on Tesla from Friday afternoon. Notice that the Post is owned by Jeff Bezos, and this hit piece of restated old bear's tales is likely a top-down requested hit.
    * Bob Lutz talks panel gaps . I loved this story. Bob Lutz, who is no friend to Tesla, inspected a Model 3 he found in Michigan and found both the paint and the panel gaps to be of high quality. His statement conflicts with those of Jim Chanos, who, like other shorts, has recently moved his emphasis in Tesla bashing from financials to items that could discourage the purchase of Teslas if repeated by the mainstream media. Looks like shorts are getting a little worried about demand actually being there and they're trying to take a proactive stance.
    * @Artful Dodger post regarding Tesla job openings for cell manufacturing management positions . The implication here is that Tesla looks to be getting ready to use the Maxwell Technology in a line of cell manufacturing that they will embark upon themselves.

    jun14short.png
    Tesla shorts were tagged with only 31% of selling on Friday. For the full story, read on.

    jun14ihor.png
    Here's a big part of the week's trading story. Even with TSLA climbing, shorts apparently increased short interest by an additional 2.2 million shares in the past week. To put this number into context, that's about 400K to 500K of short-selling per trading day. A 40K sell in one minute can substantially decrease TSLA's price, and shorting was sufficiently high to generate 10-12 40K selling events during each trading day. Friends, that's a LOT of headwind and TSLA climbed anyway.

    jun14ihor2.png
    To answer a couple questions, there is really no absolute limit to the percentage of float that can be owned by shorts, it could theoretically exceed 100% for the reason Dusaniwsky states. That said, from a practical standpoint, we're not likely to see more than a few million more shares be shorted unless macros or news changes significantly. When supply of shares to short noticeably exceed demand for shares to borrow, an interest rate of about 0.75% results. We've reached the point in demand, however, where the cost to borrow TSLA is above 1% and rising. Once the cost of borrowing gets too high, some shorts choose to cover unless they feel that a big dip in TSLA is inevitable. Thus, I think unless the story changes dramatically, the headwind we longs have been bucking will go away within a week or two.

    Regarding the borrowing interest rate for shares shorted, it's really a question of supply and demand. Back in 2016, shares were being recalled by longs so that they could vote on the SolarCity acquisition. This recall put huge pressure on the supply of shares to short and interest rates spiked. In more recent times, the quantity of shares in float has increased for reasons such as employee stock awards, Maxwell acquisition, etc. Thus, a higher interest rate is not needed at 40ish million shares shorted because available shares are plentiful. We've finally reached that point where more shorting will result in a noticeably higher interest rate, and I think the rising rate will result in shorts not pushing the numbers much higher than current 46M shares unless news or macros change considerably.

    The shorts are still way up in profits for 2019, and so don't expect a squeeze anytime soon. The good news is that if most shorts remain in TSLA as a good Q2 comes forth, they're going to ride the SP higher to the point where things do become critical for them. At that point, you want to be well-invested because a positive catalyst could set off a chain-reaction of covering.

    Why do I believe the battery/powertrain event will be a positive catalyst rather than the kind of reactions we saw from the Model Y event or even the Automation Day? The Model Y event was intentionally underplayed as many of us theorized and as Elon admitted earlier this week. It gave ding-dong analysts an excuse for saying Model Y isn't creating much buzz, which simply isn't true. As for the Automation Investor's Day, most of the analysts were over their heads and skeptical of the technology, even though the Tesla team did a great job of laying out why data is so important and why lidar is the wrong technology of choice. The battery and powertrain day, however, will likely include numbers (production possible in current GF1 building, percent cost savings once Tesla transitions to Maxwell's DBE technology, increases in range, etc. that analysts can plug into their spreadsheets and come up with positive results. Remember, too, that Elon, JB, and Dirk were beyond giddy when talking about what's coming. Can't wait, it'll likely be a huge wakeup call to the automobile industry.

    jun14tech.png
    Looking at the tech chart, the biggest takeaway is that TSLA appears to be consolidating in the current 215ish range. This is a healthy thing for the stock to do and prepares it for running higher. Now, what we need is more cooperation with the bollinger bands. The upper-bb is only 222 and falling, which will create resistance in climbing. We need to see TSLA heading higher so that we can get that upper-bb climbing as well and avoid any more headwinds than absolutely necessary. Also, note the volume has been low these past two positive days. Low volume is great for consolidating, but it'll likely need to pick up if we're going to see any dramatic climbs.

    For the week, TSLA closed at 214.92, up 10.42 from last Friday's 204.50. This was the second noticeably positive week in a row. Have a great weekend.

    Conditions:
    * Dow down 17 (0.07%)
    * NASDAQ down 40 (0.52%)
    * TSLA 214.92, up 1.01 (0.47%)
    * TSLA volume 7.4M shares
    * Oil 52.51 on 6/15
    * Percent of selling tagged to TSLA shorts: 31%
     
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  4. Artful Dodger

    Artful Dodger ♫ sniffin' the mornin' cool ♫

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    Hi Papafox,

    Good review. Exciting times to be in TSLA, wot? Here's some more backgrnd:
    Drew has his BEng in Electrical Engineeering from Stanford. Wikipedia says:

    "Baglino moved to Tesla and in 2006 was an electrical engineer for Tesla in San Carlos, California. At Tesla he worked on digital test equipment, leading to performance improvements on the 2008 Tesla Roadster. Baglino designed the dual motor system for the Tesla Model S, and power-train control algorithms.[4] As of 2015 he was also leading the electrical and control side for Tesla grid-tied battery products."​

    It sounds like Drew was instrumental in obtaining the (surprising) efficiency gains when Tesla added dual motors to Model S (c.f. "torque sleep" algorithm).

    It also sounds like Drew is the engineer who made the "100-day miracle" happen with the South Australian grid-tied battery. No worries, wot?!

    While on-stage with Elon and JB during the 2019 AGM, Drew advanced this Creed:
    • Intention
    • Intelligence
    • Invention
    "Make it happen!". Sounds like a plan. I'm looking forward to the ride!

    Cheers!
     
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  5. Papafox

    Papafox Active Member

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    @Artful Dodger , thanks for the useful insight in the main investors' thread and the background on Drew Baglino in this thread. I promise not to spell his first name as D-I-R-K any more ;)
     
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  6. Papafox

    Papafox Active Member

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    jun17chart.png
    Today was yet another important day for TSLA longs as the stock surged higher, crossed the upper bollinger band, then adjusted a bit to be closer to the upper bb. Sometimes TSLA will move outside the bollinger bands but we typically see the bands or the SP move so that the SP is within the bollinger bands after about 2 trading days. Today's trading basically established that the consolidation we've been seeing around 215 is now complete and it's time to head higher.

    TSLA briefly trading slightly red in the hour leading up to market open, but it quickly ran up to 220, ran into either capping by shorts or other resistance, then continued higher toward the upper bollinger band.

    Volume was 12 million shares, which is typically below the amount you'd expect to see in a serious breakout. What was the reason for the strength of TSLA today? I think it took the weekend for some investors to fully appreciate all the leaked emails and Elon's statements from the annual meeting. What's becoming obvious is that Q2 is going to be pretty good if not a record delivery month and that the tales of gloom and doom told by the media and certain analysts were indeed inaccurate.

    News today included:
    * Model 3 long range RWD has been discontinued, according to InsideEVs. The bad news is that in markets such as Australia, the LR RWD M3 is the version most in demand. Hopefully, buyers will opt for the LR AWD instead (an incredible car, I know because I own one). The good news is that Tesla is striving to reduce the variations in vehicles so that it can batch produce rather than build custom M3s to order. The wider variation in choices of Model X and S in terms of interior options, etc. is likely to continue as these are premium vehciles.

    * Electrek has an article stating that Teslas depreciate only half as quickly as typical ICE vehicles. The article also shows considerable differences in depreciation between Teslas and other EVs (Teslas do much better). The good news is that this study helps confirm the fact that total cost of owning a Tesla is much closer to an ICE vehicle even if the ICE costs much less.

    jun17nas.png
    By 10am the NASDAQ had pretty much completed its climb for the day and held close to its 0.62% gains until the end of market trading

    jun17short2.png
    TSLA shorts were tagged with 42.5% of selling today. This is a somewhat strange reversal since today was the kind of day when short manipulators cannot typically make money. They must have thrown a good amount of resources toward stopping the run up, only to discover they were dealing with a steamroller.


    jun17tech.png
    Looking at the tech chart, we FINALLY see the mid-bollinger band (dashed green line) ending its downward plunge and actually starting to climb. The volatility of today's big gains caused both the lower bb (175.48) and the upper bb (224.91) to both widen. Notice, too, how the stock price climbed slightly above the upper bb and then settled back much nearer to the bb.

    I haven't heard any word yet whether shorts are starting to cover, but with today's relatively modest volume it's entirely possible that most all the buying today was from longs.

    What we'd really like to see now is a continuous climb that slowly pushes the bollinger bands higher. Even consolidation along the way will be helpful since the mid bb is nearly 25 dollars lower than the stock price. It would be nice to get to the P&D report and then to the Q2 ER with the upper bollinger band significantly higher and not interfering with the climb. Although a climb such as today's typically gets constrained by the bollinger bands, a climb on important news (such as what could be potentially delivered at the Q2 ER) can run much higher above the upper bb before it falls prey to the tractor beam. In the meantime, a slow but steady climb that continues to pressure the upper bb would be ok in my eyes and it would be a good signal to technical traders that the downtrend is effectively over.

    Besides potential good news from the P&D report or Q2 ER, other potential positive catalysts that could materialize soon are:
    * Short-selling switching from a headwind to a tailwind- We don't know if shorts started covering in any real numbers today, but as the SP climbs, at some point they surely will
    * Institutional investors start buying TSLA again- Many fund managers rely upon technicals as a major input to their trading decisions, and TSLA still has not broken free of the descending wedge downtrend. Many of us can see the descending wedge is no longer dogging TSLA, but until the SP pops out the top of the wedge, some fund managers will be reluctant to buy. I believe last time I looked the top of the wedge was in the 240s. It will be decreasing with time and we could even pop through the top by end of this week. Rest assured, the shorts will put up some resistance for crossing that boundary, but once TSLA has established itself as free of the downtrend, fund managers will be much more inclined to dive in without suffering ridicule for the decision. Look for higher volumes and more steady price rises as the institutional investors join the game.

    * Dow up 23 (0.09%)
    * NASDAQ up 48 (0.62%)
    * TSLA 225.03, up 10.11 (4.70%)
    * TSLA volume 12.1M shares
    * Oil 51.93
    * Percent of selling tagged to TSLA shorts: 42.5%
     
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  7. Papafox

    Papafox Active Member

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    #2567 Papafox, Jun 18, 2019
    Last edited: Jun 18, 2019
    jun18chart.png
    Today's TSLA trading reads like a suspense novel. Ready?

    Begin with an upper bollinger band in the vicinity of 229. Right after market open the trading was absolutely ferocious, with 82K shares trading at 9:32am and 110K shares trading at 9:33am. The stock price shot up to 230 and hesitated there momentarily as it vanquished the capping/resistance, then proceeded all the way up to 234.50 just 21 minutes after open.

    Here's where the plot thickens. A climb $5 over the upper bb without sufficient news to justify the climb is a shaky operation and, not surprisingly at all, various traders (likely including shorts) pushed the stock down towards the upper bb with selling/short-selling. This was a really nice setup for a short who wanted to make money on a stock that just placed itself in a vulnerable position. You short at 234 plus a number of lower levels as well and plan to cover before end of day at a nice profit.

    From 11:15am to 11:45am TSLA did what it would in a rational market: It settled just above 229, right in the vicinity of the upper bb. That's not the end of the story, however. A downtrend was established as TSLA gave up the over-exuberance and settled near the upper bollinger band, and rule # 367 in the short-seller's handbook of dirty tricks says "Never turn your back on a downtrend that has been gifted to you." Alas, the best way to keep a downtrend going is with some really good FUD, and lo-and-behold BusinessInsider stepped forward and produced sufficient FUD. The idea is for longs to read the FUD, see the downtrend, and believe that investors are selling because of the FUD, rather than the totally benign reason of overshooting the upper bb. In this case, the FUD says BI got their hands on a document that suggests that one segment of Tesla's Model 3 production has been working at a rate of only about 700 vehicles a day, not the 1000 Model 3s a day that Elon suggested was needed to set a record quarter. The problem is that the segment could be something like seat manufacturing and existing inventory doesn't require the high numbers in order to support a high output of cars. We won't likely learn the truth anytime soon, but the idea suggested a reason for dread, and when combined with the fall from 234, some uncertainty settled into a few investors.

    Every time shorts tried to blast below the 229 price point, however, TSLA kept bouncing back. Finally, the shorts pulled out the heavy artillery, and during a 7minute session from 12:47-12:53pm no less than 213K shares were sold, enough to get TSLA to kiss the red/green line. Check out the substantial trading that erupted every time the shorts tried to push TSLA lower. The afternoon was spent it a game of whack-the-mole, trying to pound TSLA back into the red. By close we saw no less than 18K shares trade hands at 3:56pm in order to get TSLA set up for closing 29 cents in the red. According to TMC member @uselesslogin 's post on TMC , the lending rate for shorting TSLA jumped from from 1.2% in the morning to 2.1% in late afternoon, thus suggesting that shorts at IB were pulling out all the stops to make today a turnaround day for TSLA. Perhaps the pre-arranged trade at 4:27pm was an opportunity for those IB short-sellers to cover. Meanwhile, the BusinessInsider FUD piece will likely get discounted in time and the appreciation of TSLA will then continue. Recent reports of 1000 Teslas a day being delivered in North America conflict with the implications of the BI article.

    A positive news story today was this Teslarati article about a Chinese bank offering 0% interest for 60 months on purchases of select Tesla Models. The no cost financing could be a nice boost to sales. Looking forward to hearing more details.

    jun18nas.png
    The NASDAQ was up 1.39% today, with the Dow up nearly as much. Huge up days for the macros are not necessarily good trading days for TSLA. The shorts will typically do a mandatory morning dip or pull another maneuver to scare traders away from TSLA on such a day and toward stocks that more reliably rise with the macros.


    jun18short.png
    TSLA shorts were tagged with 45.5% of selling today, pushing recent high levels of selling by shorts

    jun18ihor.png
    Meanwhile, if you look at this Dusaniwsky chart, you can see the blue line now indicates a trickle of short covering starting after huge increases in short interest during May and early June.


    jun18ihor2.png
    Tesla turning in a sufficient financial performance in Q2 to get brought into the S&P 500 is not likely, but also not impossible. Now is a time you don't want to be holding your breath for the timing of TSLA's next big run upwards, nor do you want to be on the sidelines. The squeeze will come in its own good time. Don't miss it.

    jun18tech.png
    Taking a look at the tech chart, you can see how TSLA ran well above the upper bollinger band, corrected down to it, then was punished with FUD and short-selling. Fortunately, I doubt many investors were scared away today. Instead, the shorts managed to perhaps slightly delay TSLA's climb through the descending wedge and out the top.

    Conditions:
    * Dow up 353 (1.35%)
    * NASDAQ up 109 (1.39%)
    * TSLA 224.74, down 0.29 (0.13%)
    * TSLA volume 12.4M shares
    * Oil 53.98
    * Percent of selling tagged to TSLA shorts: 45.5%
     
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  8. Papafox

    Papafox Active Member

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    jun19chart.png
    Today was a low-volume day with no news of consequence and relatively neutral macros until about 2pm, when they headed higher. Traders were watching the Fed meeting to see whether the market would run up or down as details emerged. In this neutral situation, the shorts managed a spirited mandatory morning dip, which was defeated fairly quickly and turned into a small rally, also typical. Shorts capped that rally after allowing the stock price to run a bit higher than 227, then appear to have implemented the 227 cap two times more during the day. Once the SP was under control the cap was lowered to 226 for much of the mid-day trading. We saw lots of attempts to push the SP down to the red/green line and each attempt was met with a recovery as longs bought more TSLA.

    Once the broader markets started to rise after 2pm, TSLA rose too, but not as quickly as you would expect for a stock that magnifies the NASDAQ's moves. About 18 minutes prior to close, TSLA was at 227 but shorts managed to trim 50 cents off the price before close. The market ultimately rejected this last-minute piece of Tom-Foolery, and TSLA closed at 227.40 in after-hours.

    On days when there's a macro movement coming in late afternoon, shorts typically take advantage of such a setup. They'll cap going into the news, they'll push down during the rise if it's good news or they'll emphasize the downward movement if it is bad news, and in both instances they'll try for a dip right before close. If you look at the sharp icicle shapes to today's trading you will realize that TSLA continues to be a battleground. Take a look, too, at the tech chart. The wide daily price swings are evident in the long candle wicks, but look how short the candles themselves are from open price to close price. Such small distances between open and close price and the need for the stock to get its gains by gap ups between trading days suggests strongly to me that we're seeing significant manipulations of the stock price during these typical trading days.

    jun19nas.png
    The NASDAQ closed up 0.42% as it shook off its red ink upon hearing that the Feds were not raising interest rates in June


    jun19tech.png
    The upper bollinger band stands at 231.19, about $4.50 higher than today's closing price. The upper bb is set to climb quickly enough to allow $4/day rises in TSLA without the stock bumping its head on the upper-bb, but we've been averaging less, due to the work of shortie. Nonetheless, TSLA has its eye on 240 and is inching closer.

    Conditions:
    * Dow up 38 (0.15%)
    * NASDAQ up 33 (0.42%)
    * TSLA 226.43, up 1.69 (0.75%)
    * TSLA volume 6.4M shares
    * Oil 54.78
    * Percent of selling tagged to TSLA shorts: 42%
     
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  9. jkirkwood001

    jkirkwood001 Member

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    Hi Papafox,

    Thanks for your insightful column, most of which, I'll admit, goes over my head.

    Yesterday I noticed 3.8 million shares sold around 12:15 PM. Any idea what the significance of that is? I don't see daily trade volume on Yahoo for more than 5 days, but still, that looked like an unusually large amount. Oddly, it didn't seem to influence the SP much at all.

    Thoughts?

    If this should go in the general thread, please let me know.

    2019-06-20 18_41_04-TSLA 218.53 -7.90 -3.49% _ Tesla, Inc. - Yahoo Finance.png
     
  10. Papafox

    Papafox Active Member

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    jun20chart.png
    Today the macros were way up, and so the shorts needed someone to do their bidding to prevent TSLA from climbing into the 230s and causing more shorts to jump ship. BusinessInsider had already spent their FUD capital this week on their 700/day M3 undisclosed production segment story, Morgan-Stanley had pretty much deleted it's FUD capital too, so both weren't available, but dependable FUDster David Tamberrino of Goldman Sachs was more than pleased to step in and save the shorts' bacon today with a real steaming pile of sugar of a FUD piece today in which Goldman slashes TSLA price target on demand concerns. I'm not going into too much detail but calls for a mere 12% increase in TSLA revenues next year give you some idea of the accuracy of his hit piece (hint: "David, there's a second Tesla factory opening at year end and it serves the largest auto market in the world, tariff free" [credit to a TMC member for this observation]). Other astute observations by different TMC members are that Friday's option expirations are a quadruple witching day (LOTS of options expiring) and that the maximum pain is set at 222.50. The likely gross inaccuracies of Tamberrino's predictions added to the timing of these predictions on a day with positive macros and a day before options expiration could of course be a great reason for the SEC to jump in and investigate for market manipulations, but of course we know how unlikely such a move would be. Thus, the mischief makers continue to manipulate away and I avoid short-term option plays because, folks, this is not an honest casino we play in.

    Initially, we saw the expected mandatory morning dip right after market open, followed by an immediate rejection of that dip (and Tamberrino's hit piece) by the market and TSLA briefly touched green. Alas, the macros began a descent after 10am and even though they remained green, the descending macros were reason enough for the shorts (with a bit of strategic selling) to get a dip going with TSLA. Check out the various icicles in the TSLA chart, suggesting big selling sprees by shorts and then recoveries as the market rejected those attempts to pull TSLA down. For example, in a 2 minute period from 2:50-2:51pm, 55,000 shares were sold, allowing TSLA to briefly hit its low for the day. TSLA was on track to recover to a price above 220, but in the final minutes a burst of short-selling kept TSLA below 220 in order to make today's dip look more ominous. The level of apparent manipulations were high enough (especially after the market rejected the mandatory morning dip and Tamberinno's story in general) that I suspect a good portion of today's manipulations were from non-FINRA-reporting sources and the manipulations were higher than what you would expect with 45% of selling being done by the shorts.


    jun20nas.png
    Both the NASDAQ and Dow closed well up today, with the NASDAQ (shown above) gaining 0.80%

    What I'd like to suggest is that today's manipulations were part of an uptick in short-seller manipulations in an attempt to fend off a climb in the stock price that would cause additional reduction in short interest. Looking at the percentage of selling by shorts chart below, you can see that starting on Monday we've seen elevated percentage of selling, which I interpret as elevated short-term manipulations by short-sellers.

    jun20short.png
    TSLA shorts were tagged with 45% of selling today

    jun20ihor.png
    The slight uptick in the blue line above suggests that short covering has paused as the manipulations of TSLA increased


    jun20tech.png
    The tech chart suggests that shorts are trying to engineer either a dip through Friday so that hedge funds and shorts could benefit from these manipulations or that they'd like to reestablish a downward movement of the stock. The problem is that with Morgan-Stanley, Goldman, and BusinessInsider having all expended recent FUD capital, the availability of market-moving FUD is starting to get slimmer.

    Conditions:
    * Dow up 249 (0.94%)
    * NASDAQ up 64 (0.80%)
    * TSLA 219.62, down 6.81 (3.01%)
    * TSLA volume 11.9M shares
    * Oil 57.34
    * Percent of selling tagged to TSLA shorts: 45%
     
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  11. SOULPEDL

    SOULPEDL Member

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    Thanks!
    So Tesla still has teeth, just not enough today against a mini Short attack + Morgan Stanley downgrade claiming demand concerns longer term.
    How I take it...
     
  12. Papafox

    Papafox Active Member

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    I'm trying to wrap my mind around the possibilities and will post in the main investor's thread this evening about open interest in options and how that might be affecting trading. The note today was from Goldman.
     
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  13. Papafox

    Papafox Active Member

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    #2573 Papafox, Jun 22, 2019
    Last edited: Jun 22, 2019
    jun21chart.png
    What really struck me about Friday's TSLA trading was how normal it was. Take a look and compare TSLA to the NASDAQ chart below. Both began low as the macros were indeed going to be negative on open, and the NASDAQ didn't begin with the mandatory morning dip we saw beginning a few minutes before market open with TSLA, but otherwise, TSLA was trading like a somewhat normal stock following the macros. TSLA started low, peaked in the morning around 11am when the NASDAQ peaked in the green, followed the NASDAQ's ups and downs throughout the day (except as TSLA gained relative strength in the afternoon).

    jun21nas.png
    The NASDAQ lost 0.24% on Friday but set the tempo for TSLA's first half of day trading

    Why did TSLA gain relative to the NASDAQ in the afternoon? I think longs were mostly just holding their shares, not buying or selling, until they realized that no big manipulations were hitting TSLA on Friday. When this lack of manipulations became clear, then I believe longs started buying in the afternoon to prepare for a positive Monday morning opening.

    Why did we see so much less in the way of manipulations on Friday compared to Tuesday through Thursday, though? I was curious to see if the holders of the puts that expired on Friday would give a big push to bring the SP down before expiration. It never happened. Instead, as @Sancho and I discussed on the main investor's thread, maybe the manipulations were being done by the seller of calls, instead. Once the SP approached 220, though, these sellers had less incentive to push hard because the vast majority of gains from calls that expired Friday were all but neutralized at 220. See chart below.

    621maxp800.png
    If we run with the theory that sellers of calls have been the principal manipulators, then take a look at next week's options expirations (chart below). Calls are all but gone. There's little incentive for call sellers to manipulate at all next week. Look instead at the 30,000 210 strike puts that are set to expire. If the buyers of the puts are the manipulators, you would expect a major effort to bring the puts into the money before next Friday's close. I suspect that perhaps we won't see much manipulations, but I'm not betting on it either. Rather, I see the comparison between last week's trading and next week's trading as a really great way to figure out who's doing the negative manipulating of TSLA. If we can better understand who is doing the manipulating, we can better predict when the manipulations will come and will cease, which is hugely important information for us as investors. Can't wait to see what happens, one way or the other.

    628maxp800.png
    One way to verify that manipulations were down on Friday was the huge dip in percent of TSLA selling by shorts. Numbers below 30% are rather rare.
    jun21short.png
    On Friday, shorts were tagged with selling only 29.5% of TSLA shares, which for TSLA is about as low as it goes


    jun21tech.png
    Looking at the tech chart, you can see how nicely the mid and upper bollinger bands have finally stopped their downward movement and at long last have turned upward, with the upper bb above 235 now and giving TSLA room to run on Monday morning.


    jun21techweek.png
    Here is the tech chart but with each candle representing a week instead of a day. Notice that TSLA has strung together three consecutive positive weeks. Technical traders refer to this as "three white soldiers". It's a good sign that the downtrend has been vanquished. Now, if we can just get TSLA to bust through the top of the descending wedge the institutional investors (who really move the stock upwards) can come back into play.

    For some fun viewing, check out Zac and Jesse's Tesla video this week as they discuss the eventual TSLA short squeeze. In particular, check out 30:06, where they have a clip of Steve Jobs talking about the shorting and the FUD from the Wall Street Journal that was affecting the stock price. You'll notice the similarities with a certain company that we follow, I'm sure.

    TSLA closed up for the third week in a row on Friday, up 6.94 from last week's 214.92. Enjoy your weekend.

    Conditions:
    * Dow down 34 (0.13%)
    * NASDAQ down 30 (0.24%)
    * TSLA 221.86, up 2.24 (1.02%)
    * TSLA volume 8.2M shares
    * Oil 57.43
    * Percent of selling tagged to TSLA shorts: 29.5%
     
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  14. Papafox

    Papafox Active Member

    Joined:
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    Messages:
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    jun24chart.png
    Today was a really low volume TSLA trading day with a descending NASDAQ. Let's compare the two charts.
    Note: our normal NASDAQ-provided daily chart was not available today, so we are using one from Yahoo.

    jun24nas.png
    The NASDAQ opened in the green but slid throughout most the day to close down 0.32%

    While the NASDAQ jumped around a bit in the morning, it descended steadily after 12 noon. Interestingly, TSLA headed higher as the NASDAQ sank. One possibility is this story shared by Reuters, which talks of the exemption Tesla is receiving from tariffs on Japanese aluminum for battery cells. The actual savings are minimal ($1.X million, according to one TMC member), but the quantity of aluminum in the exemption was high, suggesting significant expansion of cell production. Perhaps it was the quantity of aluminum that encouraged the market. The timing of the article was about right, in any event.

    Visible manipulations of TSLA were low today. We saw a mandatory morning dip (with some correlation with a NASDAQ dip of the same time) but you don't see the significant icicles of manipulators pushing hard down, followed by longs bidding the stock right back up. This is a positive sign and consistent with the theory that the sellers of the calls are the manipulators instead of the shorts themselves. What I expect to see is evidence of both groups doing the mischief, but I will hold judgement as the data comes in.

    Interestingly, a positive article on Tesla (Model 3 demand is strong) appeared today on Seeking Alpha. The article might be worth looking at not only to reward the author but also to look at the comments and better understand the thoughts of the SA shorts. Their thoughts emphasize that Q1 was the quarter that really showed how little demand there is for Tesla Model 3, Models S & X are losing sales quickly, and Tesla will lose money on Model 3 even if sales are strong. It's useful to understand these views because it gives some idea of when these people might cover. I suspect they will mostly hold strong after a good Q2 P&D report because they're relying on their "Tesla loses money with every car it sells" argument.

    jun24troy550.png

    Speaking of Model 3 demand, Troy updated his Tesla delivery estimate for Q2 today, his third estimate this month, and he now expects 89,619 Teslas to be delivered in Q2. Troy has a reputation for being conservative in his estimates. He greatly underestimated deliveries in Q4 (or was it Q3?) but was very close in Q1 19 when everyone else was way too high. Thus, his estimate of nearly 90K deliveries is a very positive sign. In early June, Troy estimated closer to 80K deliveries for Q2, which he later updated to 85K deliveries, and now he's at nearly 90K deliveries. I will cut Troy and other delivery estimators some slack here. Sometimes the evidence of deliveries changes as the month progresses. For example, the zero percent loans in China for certain Teslas might have significantly accelerated sales during the past week.


    jun24ihor.png
    Taking a look at short interest, Dusaniwsky's latest chart suggests that once TSLA started falling on Thursday, shorts started to acquire again, but slowly. The implication is that we're at a place where a rising stock price will likely result in slow short covering but a falling price will have the opposite effect.

    jun24short.png
    Short-sellers were tagged with 35% of TSLA selling today, a low number that is consistent with the shape of the daily chart. We might have seen shorts doing some selling into the close, or that dip in TSLA might have been a delayed response to the NASDAQ dip. If we had the quantity of trading at 4:00pm and it was high, then I would speculate on shorts doing a mischievous push down into close, but that data is not available on today's Yahoo chart.

    jun24tech.png
    Looking at the tech chart, you can see the very nice recovery of all bollinger bands continuing. The declining volumes on these positive days indicates to me that not many longs are interested in selling ahead of the Q2 P&D report. As we near the end of June, don't be surprised to see further uptick in the stock price and a gradual increase in volume, as well.

    Also, we had consolidation around 215 before jumping higher and now TSLA is consolidating about 8 dollars higher. I suspect we run up further once this consolidation has run its course.

    Conditions:
    * Dow up 8 (0.03%)
    * NASDAQ down 26 (0.32%)
    * TSLA 223.64, up 1.78 (0.80%)
    * TSLA volume 5.6M shares
    * Oil 57.77
    * Percent of selling tagged to TSLA shorts: 35%
     
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  15. Papafox

    Papafox Active Member

    Joined:
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    jun25chart.png
    I'm traveling today and so the analysis will be brief. Today the macros were in a fretful mood and the NASDAQ fell 1.51%. Tesla's 1.73% fall was rather tame when you consider that Apple and Amazon fell about as much (in percentage basis). Notice the distinctive icicles today, which suggest that shorts or other manipulators were taking advantage of macro dips to sell with the dips and put the dips on steroids but even with the bad macros longs were bidding the SP up at times. TSLA truly is a battleground stock at the moment. Notice too the rather strong recovery of TSLA leading up to 2:00pm. Overall, volume of 6.2 million shares traded suggests that longs are in no hurry to sell, they're biding their time to the 2Q P&D report.

    News centered on a leaked email from Elon to employees that was the basis of a story by Business Insider. Here's the text, according to BI:

    As you may have noticed, there is a lot of speculation regarding our vehicle deliveries this quarter. The reality is that we are on track to set an all-time record, but it will be very close. However, if we go all out, we can definitely do it!

    We already have enough vehicle orders to set a record, but the right cars are not yet all in the right locations. Logistics and final delivery are extremely important, as well as finding demand for vehicle variants that are available locally, but can't reach people who ordered that variant before end of quarter.

    I have great faith in you. Please let me know if there is anything I can do to help.

    Thanks,
    Elon


    This Electrek article is less encouraging and suggests that North American deliveries are only 49,000 so far in Q2. This article does state that orders are high but the difficulty is matching buyers with the desired configurations for vehicles that are geographically close enough to be delivered before the end of the quarter.


    jun25nas.png
    The NASDAQ fell 1.51% today. Dips at 11:00am, 1:00pm, and 2:30pm were exaggerated in TSLA trading.


    jun25short.png
    Shorts were tagged with 41.5% of TSLA selling on Tuesday, up significantly from Friday. What we may be seeing is simple knee-jerk reactions to TSLA stock declines, which brings in new shorting and exaggerates the dips. OTOH, we're starting to see light covering on up days for TSLA, which assists the climbs.



    jun25tech.png
    Despite the rather boring consolidation that TSLA has been in for a couple weeks, the bollinger bands continue to rise with the SP above the mid-bb, setting the stage for more upward movement when the news justifies it.

    Papafox just happened to be 2500 miles out of his way when driving by the Fremont factory logistics lot this afternoon. I was amazed by the volume of activity. Tesla is definitely pulling out the stops in an attempt to reach their record this month. I would be surprised if there were less than 2 dozen car carriers present, and a loaded truck departed the truck every few minutes. Is there a demand problem? Ah, no.
    jun25lotshot1.png

    jun25lotshot2.png

    Conditions:
    * Dow down 179 (0.67%)
    * NASDAQ down 121 (1.51%)
    * TSLA 219.76, down 3.88 (1.73%)
    * TSLA volume 6.2M shares
    * Oil 58.90
    * Percent of selling tagged to TSLA shorts: 41.5%
     
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  16. Papafox

    Papafox Active Member

    Joined:
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    jun26chart.JPG
    Today was day two of traveling for me. We've seen a fair number of TSLA trading days like this before. Tesla starts upward at a great rate, peaks, and then dips so as to close slightly in the red. On the surface it looks like a manipulation inspired by a downward slope of the NASDAQ today, but I know there were a few negative analyst calls today and perhaps they were important in the stock's trajectory. I hope to get a better handle on the trading this week and share my thoughts, now that I'll be able to apply more time to the task. Right now it doesn't look like the holders of those 30,000 210 strike puts that expire Friday have the horsepower to move the SP down that much or if they are even trying. One thought is that when TSLA runs quickly up 7 or 8 with no significant news, it's vulnerable to a push down when the NASDAQ is descending, so perhaps the manipulations we're possibly seeing are the result of profit-motivated traders taking advantage of the volatility of this stock this week. Next week after the P&D numbers are released, TSLA trading becomes an entirely different kettle of fish.

    One important note is that volume remains relatively light (8.3 million shares) and so nothing earthshaking is happening.

    jun26nas.jpg
    The NASDAQ closed up 0.32% after opening quite a bit higher

    jun26short.jpg
    Shorts were tagged with 41% of TSLA selling today

    Looking toward Thursday, Trump and Xi will be meeting at G20 summit and any encouraging joint statements could give the markets a big boost.

    Conditions:
    * Dow down 11 (0.04%)
    * NASDAQ up 25 (0.32%)
    * TSLA 219.27, down 0.49 (0.22%)
    * TSLA volume 8.3M shares
    * Oil 59.09
    * Percent of TSLA selling tagged to shorts: 41%
     
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  17. Papafox

    Papafox Active Member

    Joined:
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    jun27chart.JPG
    Today began with the inevitable mandatory morning dip, despite the NASDAQ being well up. That dip was followed by a few quick sessions of whack the mole and when the stock broke free of the whack the mole routine it celebrated by running up to nearly 222. As with yesterday, forces pushed the stock lower with a timetable similar to the NASDAQ's dip but with much more intensity, until TSLA hit the red again and a few more sessions of whack the mole ensued. Alas, as TSLA broke free this time, it started a strong climb into close.

    jun27nas.jpg
    The NASDAQ had a good day, closing up 0.73%

    In news, Evercore released a note that suggests Tesla will miss its Q2 delivery target. As part of the FUD machine, Evercore made a point of suggesting that Tesla has "lost" any chance of delivering 750,000 to a million cars/yr. anytime in the early 2020s and that the stock will trade in the 150 to 250 range. Looking more closely at the Evercore message, you can see that other analysts have picked up upon the Adam Jonas theme of Tesla becoming just a niche car manufacturing company. Further, the real FUDsters like to mention 150 as a low end number in order to scare investors and suggest you haven't seen the bottom yet. Because of the current trends in FUD, it will be important that Elon and company explain to the analysts their plans for expanding cell production, timetables, etc. so that the niche car manufacturer story can be put to bed.

    Below I reproduce the Opricot Open Interest and Options Volume charts for Friday's expiration. Notice that the 210-strike puts that expire on Friday now exceed 40,000. I cannot believe that the manipulations we're seeing are primarily directed by shorts and the holders of the 210 puts because the effort has been so lame if that was the goal. Rather, I am starting to believe that big dogs such as hedge funds are trying to do manipulations which are themselves profitable. For example, it's typically easier to make a profit on turning a morning climb of TSLA into a descent if you have the horsepower to pull it off. An afternoon rally into close, like we had today, is a different matter and is something that is likely unprofitable to counter because of the short amount of time to achieve a lower stock price and cover before day's end.

    jun27opricot.jpg

    As we get closer to the end of the quarter, it looks like it'll be close whether Tesla delivers above 90K in Q2 and beats the 90,700 deliveries record of Q4. On the plus side, many reports of pre-raven S and Xs having mostly been sold already is a positive development. A zero interest loan in China could help surprise to the high side, too. On the negative side, the results of Q2 deliveries and production fall during the July 4th week, a notorious time for negativity and mischief by the enemies of Tesla.

    jun27tech.JPG
    Looking at the tech chart, today's gain puts TSLA in continued horizontal trading as the various forces make a climb into the P&D report more difficult. The good news is that the bollinger bands continue to climb in this consolidation.

    Conditions:
    * Dow down 10 (0.04%)
    * NASDAQ up 58 (0.73%)
    * TSLA 222.84, up 3.57 (1.63%)
    * TSLA volume 6.3M shares
    * Oil 59.30
    * Percent of TSLA selling tagged to shorts: 41%
     
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  18. Papafox

    Papafox Active Member

    Joined:
    Jan 12, 2013
    Messages:
    4,105
    #2578 Papafox, Jun 29, 2019
    Last edited: Jun 29, 2019
    jun28chart.JPG
    It's been a rockin' and rollin' week, my friends, but TSLA closed up for the fourth week in a row, giving additional credibility to the reversal of the stock's long downtrend. Now, all we have to do is see TSLA break its delivery record and I think the SP will then rise through the descending wedge and confirm that the downtrend has been vanquished. Fingers crossed.

    jun28nas.jpg
    On Friday, the NASDAQ rose 0.48%, with an enormous climb in the final few minutes

    Comparing the two charts, you can see substantial indications of manipulations, beginning with a pushdown toward 220 right before market open. The market rejected that dip and when a tiny MMD was vaporized not long after open, TSLA ran upwards but fell short of 225. The entire trading day was a series of attempts to cross 225 and each burst was sold off (likely profitably by big dog hedge fund manipulators). At the end of the day TSLA looked like it was going to repeat Thursday's climb into the close, but with good macros and no news of consequence, TSLA made a mad dash toward the red in a clear manipulative end of the trading week. Only the huge NASDAQ gains a few minutes before close saved TSLA from closing in the red, I suspect (that and traders buying in at end of day to take advantage of the usual Monday morning amateur hour rise in the stock price).

    Who was doing the selling into close? I think it's fair to say that the shorts and other naysayers who bought the 40K+ 210-strike put contracts that expired on Friday were not the manipulators. The end of day dip was huge but it didn't start nearly soon enough to have a chance to descend below 210, and so I characterize the 210-strike put buyers as chumps rather than manipulators this week. A few thousand call contracts in the 225-235 strike range did materialize, and there's reason to believe that hedge funds which sold those calls but didn't delta-hedge were the more likely manipulators. There's a third possibility, however. In after hours trading, over 1.3 million shares of TSLA were exchanged in pre-arranged trades, with two of the three at exactly the market closing price. I wouldn't be surprised if the buyer of those pre-arranged trades got involved in the selling right before close.

    Negative news on Friday included a UBS lowering of price target. UBS is a permabear of Tesla and was the organization that produced its own teardown of Model 3 and announcement of a much higher cost to build than the Sandy Monroe teardown. The market had good reason for giving a shrug to this note.

    More consequential news came out on Saturday as the Wall Street Journal acknowledged that Q2 delivery numbers would likely look good but the market should not take such news to mean that Tesla is doing ok. The story was written by Charley Grant, whose father is allegedly a friend of Jim Chanos. I take this story and the growing number of stories that suggest good Q2 delivery numbers don't mean much as being a bullish sign for TSLA. My guess is that news organizations other than just CNBC, Electrek, and BusinessInsider have communications going with certain employees of Tesla or suppliers and that their news stories reflect information forwarded by these employees. In any event, my visit to the logistics lot of the Fremont factory last week showed incredible activity and I believe that breaking the delivery target is indeed quite possible.

    The importance of good news is that for weeks TSLA has been primed to zoom higher. You see many mornings and even afternoons sometimes when the stock runs upward at a steep angle, only to see some big dog traders sell the top off the run. The reason the big traders can cap and then reverse a run up is that there is not enough news of substance behind the run up. Nonetheless, the sentiment is there to buy so as to not be left behind when and if TSLA makes a big run for higher numbers, and so when this sentiment is combined with actual good news nobody will be able to cap the climb, and we'll see nice appreciation.

    jun28short.jpg
    Shorts were tagged with 39% of TSLA selling on Friday


    jun28tech.JPG
    Looking at the tech chart, you can see the horizontal consolidation continuing. That horizontal movement will break up or down this coming week, though, depending upon how the delivery numbers turn out. Notice that TSLA is right about on the 100 day moving average now. Climbing above the 100 DMA will put pressure on that line to eventually turn upwards. Once the 100DMA crosses the 200DMA the technical traders will consider that crossing to be of extreme importance. In the meantime, once TSLA climbs above the descending wedge I think we'll at long last see institutional investors moving back into the stock. Rising volumes along with rising share prices will be an indication of the return of these investors.

    For the week, TSLA closed up 1.60 from last Friday's 221.86. It's a small gain, one that could easily have been wiped out in the final minutes of Friday's trading. Still, this closing price makes four positive weeks in a row. Have a great weekend.

    Conditions:
    * Dow up 73 (0.28%)
    * NASDAQ up 38 (0.48%)
    * TSLA 223.46, up 0.62 (0.28%)
    * TSLA volume 6.9M shares
    * Oil 58.47
    * Percent of TSLA selling tagged to shorts: 39%
     
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  19. SPadival

    SPadival Member

    Joined:
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    Messages:
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    Location:
    Melbourne, Australia
    FYI - The UBS teardown was done by Sandy Monroe. See photos. Monroe later said he is getting sued by someone .. likely UBS, which then paid FT to publish the tear down video.

    S Padival on Twitter

    S Padival on Twitter

    This will be an interesting paragraph in a book some day.
     
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  20. Papafox

    Papafox Active Member

    Joined:
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    Messages:
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    #2580 Papafox, Jun 29, 2019
    Last edited: Jun 29, 2019
    @SPadival thanks much for the clarification. The reality is still a bit confusing all the same, so let's see if I have it right.. UBS, rather than tearing the car down themselves paid Monroe to share information about their Model 3 teardown. Monroe and Associates said the vehicle could generate up to 30% profits according to this Electrek article but UBS said a typically optioned M3 SR would sell for $42,000 and generate only $620 profit. So, it looks like UBS distorted the data they received from Monroe and tried to get the world to believe they conducted their own independent teardown. When Monroe released the numbers from his teardown, UBS didn't like Monroe making the real numbers public and threatened to sue Monroe. Yes, this will go into my book. Any additional info you can send in a PM would be appreciated.
     
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