TSLA chart above
QQQ chart above
Today the U.S. moved closer to turning the corner on COVID-19 with declines in new cases and in deaths, compared to the April 4 data. The market celebrated this ray of hope with a ferocious rally, taking both the Dow and NASDAQ up more than 7%.
Looking at the daily charts, you can see that both TSLA and QQQ opened way up for the day, TSLA up 6% at open from the previous close, and QQQ up 3.7% at open. That's a hefty 1.6X multiplier for TSLA. Alas, QQQ took a brief dip right after open and TSLA took a Mandatory Morning Dip much larger than QQQ's dip then soared to about 520 before being pulled lower.
Meanwhile, QQQ established a gentle climb and just kept climbing, with a lively spurt right at the end. TSLA, on the other hand, was pushed down below 510, worked its way back above that number, was pushed down again and then spent most of the rest of the day being capped at 510. Clearly, when looking at the effort behind the MMD and the capping at 510 while practically every other stock in the known universe was climbing with the macros, TSLA was suffering from manipulations. Moreover, with only 14 million shares traded on an up day, you would expect to see delta-hedging underway for much of the day so that market-makers could achieve neutrality, but the buying associated with the hedging was also strangely missing.
Was bad news the reason for TSLA's relative weakness to other tech-like stocks (which climbed 10% or so today)? Actually, news was fairly good. Over the weekend Tesla released a video that showed the prototype ventilator that they had largely designed out of Model 3 parts. Analyst calls? This Electrek article shows that Baird's Ben Kallo revised his price target to $525 and has a neutral rating, while Jefferies analyst Philippe Houchois predicted a 27% sales increase for Tesla but decreased his price target to $650. With both price targets higher than the current price, they should have provided an upward, not downward force.
On this CNBC video, a trader suggests that TSLA is in a 400-600 price range at the moment and there are opportunities to make an 18% return within that range.
On a personal note, I sold 100 shares this morning at 512 to initiate a short-term trade (I think the morning dip after reaching 520 was due to small traders like me selling to play the swing. I've been catching 50 to 100 point swings so far and my thought was that the very obvious manipulations today suggested some of the big dog hedge funds got surprised on the wrong side of the trade when TSLA released their Q1 P&D Report, and they've been manipulating like "sugar" to control the stock's price until the next down day of the macros allows them to manipulate it a bit lower. If TSLA goes up rather than down, I'll still smile because my trading shares are so much less than my total TSLA shares. Nonetheless, TSLA is under manipulation pressure right now.
Good things lay in store for Tesla in the future, but for now I will try to sell at apparent local tops and buy at apparent local bottoms with this small portion of my shares. For the rest, I stay long and strong. We've held strong throughout the worst of the virus's attack on Europe and now North America, and the dip defining the bottom of sentiment may have already happened, judging by the weekend news and Monday's response by the market. Hoping so.
Dusaniwsky's chart shows shorts starting to exit again, which should be a good sign.
Shorts were tagged with 59.7% of TSLA selling today, continuing a two week stretch of approx. 60% selling by shorts, which suggests a cycle of heavy manipulations
The biggest takeaway from the tech chart is that volume was a mere 14.3 million shares today, not much when the share price rose $36. That rise makes for lots of delta-hedging the market-makers must do, and yet we don't see the continued rise into the afternoon that you'd expect from the need for delta-hedging. Look, too, at the lower bollinger band (in green) and the 200 day moving average (red) moving higher. The two lines together would amount to formidable support. Maybe this is why the technical trader on CNBC today suggested that TSLA at the moment is in a trading range between 400 and 600. Another positive development is that the stock price close above the mid-bollinger band for the first time in several weeks. This crossing will help to left the lower bb and stabilize the upper bb.
Conditions:
* Dow up 1627 (7.73%)
* NASDAQ up 540 (7.33%)
* TSLA 516.24, up 36.23 (7.55%)
* TSLA volume 14.3M shares
* Oil 27.09
* Percent of TSLA selling tagged to shorts: 59.7%
Last edited: