TSLA chart above
QQQ chart above
The plot thickened Sunday evening when a report from China listed only 3635 Teslas were sold in April, down 64% from March.
Here's a CNBC version. If this story appeared in market hours it would have led to a dip, but with time people figured out 1) this is end of quarter month vs. first month of quarter, 2) the timing of a big government incentive and a likelihood of Tesla lowering the price of M3 SR+ caused many buyers to hold off on their purchases until after May 1, and 3) When the LR version of M3 was revealed, quite a few orders for SR+ were changed to LR orders. It all was overblown, just as the U.S. deliveries in first month of a quarter are always way down compared to 3rd month of a quarter. Nonetheless, the story did likely affect some investors who were not in the know and cast some doubt on today's trading.
Tesla did indeed open the factory on Monday. Elon left no doubt with his tweets and Fremont observers saw the employee lot full and tons of Model 3s in the lot (that weren't there before) and being hauled away. Notice that Tesla said that Model 3, S, and X lines would restart immediately. Why not Y? I think the obvious answer is that Tesla is hustling to get a RORO or two of European Teslas on the way from Pier 80 so that they can be delivered before quarter's end. Then Y will come into the picture big time as Tesla concentrates on North American deliveries.
Looking at the TSLA daily chart, you can see the attempts of the shorts to gauge the fear factor this morning by pushing some noticeably icicles in the Mandatory Morning Dip. With the NASDAQ up 0.78% today, TSLA had the macro backing to climb, but I suspect the leveling about 5 or 6 dollars below the red/green line was the work of hedge funds trying to avoid an excursion into the green which could set the stage for a rally. Look at that bullish rally in final hour that was not reflected in the macros when TSLA dared poke its head into the green for a few minutes and then "whack!" the stock sank back down for the close. Enough uncertainty existed today so that they got away with it.
Will Tesla be allowed to continue running Fremont in defiance of the nonelected Alameda Health Officer's position? I believe it's likely, here's why:
* Tesla hired the ultimate 300 lb. pit bull of a law firm, Quinn, to defend them against Alameda. We're awaiting word from a judge whether the county's actions will be legally put on hold while the case is prepared for consideration.
* The POTUS passed the buck to the governors on when to reopen
* The governor of California passed the buck to the counties if they wished to add some qualifications to the state's plan
* Today, the County of
Alameda passed the buck for enforcement of their rules to the Fremont Police Department. Normally a county uses the sheriff to enforce their decisions.
* We already know that the Mayor of Fremont is a supporter of Tesla and wants to see the factory up and running.The police department answers to the mayor
* And so the pass the buck process has place enforcement on the table of an entity that likely has no wishes to enforce the county's position.
What the Governor and the County Officials did yesterday and today was to call Musk a bad boy and suggest he is behaving childishly because everything was set for a May 18th opening and the Governor was going to help make this possible (until he heard that Musk already had opened). These type of condescending attitudes are typical when the government entities want to save some face and suggest that Elon's brave resistance was so unnecessary.
The truth, though, is there was no guarantee that Fremont would have been allowed to open on the 18th. The Alameda Health Officer wanted to see how the numbers looked after a week of other businesses being opened. If you look at yesterday's post, the Alameda new cases are slightly decreasing but close to flat. A trend in the wrong direction could become a reason for holding off. Similarly, number of tests conducted was only 14% of goal, and so Dr. Pan has a readily available reason for denying Tesla the right to open if she wanted.
What would serve all parties the best would be for Tesla to submit the desired documents today that Alameda is asking for and then for Alameda's health officer to realize she has lost the contest and approve Tesla's reopening, as if it was going to happen anyway. Give the bureaucrat one last face-saving opportunity.
What could really mess things up would be for Governor Newsom to take a heavy handed position regarding Tesla. I don't think it's going to happen, though, because he has far more to lose than to gain. And so we are left with some uncertainty, but with every day that Tesla stays open, the market will likely warm to the situation.
The good news is that this week, while the uncertainty is being worked out, the factory is running and Teslas are appearing in the lot.
My biggest regret? The Cybertruck is not yet available. With Elon's bold moves to reopen Tesla, those things would be selling like hotcakes as truck buyers embrace the Elon Muskitude.
Looking at the tech chart, TSLA held onto most of Friday's gains and remains above 800. The upper bollinger band would not be a problem if a solid victory of Fremont reopening is achieved. Otherwise we could see the stock price slowly increase for a while and nudge the upper bb higher. Also remember we've been on a long streak of positive macro days. Some down days is inevitable.
Conditions:
* Dow down 109 (0.45%)
* NASDAQ up 71 (0.78%)
* TSLA 811.29, down 8.13 (0.99%)
* TSLA volume 16.5M shares
* Oil 24.53
* Percent of TSLA selling tagged to shorts: 39.3%