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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. madodel

    madodel X at the end of a rainbow

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    Stay safe @Papafox
     
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  2. FireMedic

    FireMedic Member

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    I’m so sorry to hear that. Please stay safe Papafox. We need you in one piece!
     
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  3. Papafox

    Papafox Active Member

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    #3163 Papafox, Jul 26, 2020
    Last edited: Jul 26, 2020
    jul24chart.JPG
    Chart of TSLA
    jul24qqq.JPG
    Chart of QQQ

    Friday's trading of TSLA saw a dip of some 9.5% shortly after market open. I suspect there were big players who prevented the dip from touching 10% and thus they avoided the alternate uptick rule for short-selling to come into effect for two days. Once a profit-taking dip at the top of a huge run begins, it develops a momentum that can cause trading such as Friday's as people's expectations about call options are readjusted and shares are sold to unwind some of the delta-hedging put in place to cover those call options are short-term enough to likely not come into the money. Algos see the selling and join in the selling to ride the trend. Nervous investors take some money off the table. We've all seen this movie multiple times.

    I had to do a double-take when comparing TSLA's chart to QQQ's chart above. They look remarkably similar. The big difference, however, is that TSLA closed down over 6% while the NASDAQ closed down less than 1% on Friday. The two days TSLA trading with negative macros strikes me as a combination of manipulations where needed, and a tendency for profit taking as well as traders playing the dip. Let's look at all these kinds of sellers.

    Some profit taking and consolidation is good for the stock after a long climb
    I know this sounds like a doctor telling you that athlete's foot or gout is actually good for you, but hear me out. A profit-taking dip is a form of consolidation in which investors with lower convictions at that price are selling to investors with higher convictions at that price. Once that transfer of shares is completed, the stock is ready to resume its climb. Here are some examples:
    Bull profit-takers: Take me for instance. I am extremely bullish on TSLA for 2020, but I sold enough shares and leaps last Monday to buy my 2nd home. I now have taken enough money off the table that I can comfortably leave the rest in with high conviction. Once you exceed your retirement goal by 3X or 4X, you have to ask yourself, "Do I want my life to resemble Jimmy Buffet's or Warren Buffet's?" For me, the choice was the former, but I'm keeping the majority of my Tesla investment intact because of strong conviction.
    Weak longs: If a Tesla investor feels that the downside is bigger than the upside, chances are that investor's time horizon is pretty short. He will sell to someone with a longer time horizon who is comfortable with the stock in the 1400s because the new investor believes this stock is going up enough in the mid-to-long run to justify the purchase. The new investor is far more likely to ride out volatility.
    Traders: These investors really should be lumped with weak longs. They lack long-term conviction and are only in shares or call options because TSLA is "the hot stock" and has been going up. The stock price dips as they bail, but someone better picks up those shares.
    Dip players: These investors know that TSLA is volatile and once it starts down it may run down for a while. They sell when they see the downward trend and plan to rebuy once TSLA has "bottomed out." The problem is that if there are too many dip players doing the same trade, there's too much competition for buying when TSLA starts up again, and the price can run uphill remarkably quickly, often removing the option to make money by the play.

    Anyway, it's healthy to get through a consolidating, profit-taking dip after a long run because most investors are expecting one. The mindset of the market will be more positive after the profit-taking and consolidation dip is completed. Call options will become more affordable.

    Why Q3 is likely going to be great
    With Fremont installing new general assembly lines and with Shanghai coming closer to achieving design production rate for Model 3, the production numbers for Q3 2020 are going to be massive, something over 140,000. Moreover, the best way to quickly come up to speed on the implications of the Q2 ER is to watch this video by Rob Maurer, his first of 2 about the Q2 ER. Rob's biggest takeaway from the ER was that Gross Margins are going to be strong in the future. Thus, you combine improving gross margins with significantly higher deliveries and you should see record profits. Add September's Battery Day and a likely S&P500 inclusion surprise to the quarter and it looks just too good to pass on. On Monday we get to see how close the two parties are on putting together Stimulus 4. It's going to happen and will give the macros the necessary kick. For all these reasons, I am riding out the recent dip and look forward to riding this stock higher as Q3 shows the world what it has to offer.

    Coronavirus
    Along with China tensions, Coronavirus is weighing heavily on the market right now. Check out the chart below, taken Sunday evening.

    jul24covid2.png
    Much angst has developed from the second wave of COVID 19 in the U.S., but as the chart above shows, the second wave may have already peaked. Fingers crossed. Moreover, California, Texas, and Florida, the three most watched states right now, all showed declines in new cases. The market should be happy.

    One of my biggest frustrations with the coronavirus response in the U.S. has been the lack of timely studies of potential therapies. The retroactive Chloroquine and zinc study that showed a possible reduction of deaths by 80% has been stuck in peer review for weeks now. Maybe something significant has been found and maybe not, but the pacing of getting these studies out there has been dismal. Fortunately, the CDC in this article says that they're going to be conducting many scientifically sound studies immediately on a variety of coronavirus therapies.

    One new therapeutic that needs to be looked at seriously in the U.S. is one made by Synairgen, a small British biotech company. Shares soared on the company as a study in this article suggests that taking this inhaled formula of the protein interferon beta "reduced the odds of a patient developing severe disease by 79%."

    With positive developments in COVID 19 and progress toward Stimulus 4, futures were up Sunday evening as this post was written.

    jul24tech.png
    While Thursday's trading was a return to the 1500 plateau, another day of dismal macros led to TSLA testing the mid bollinger band and then bouncing. If you look at the other instances of touching the Mid-bb in the chart below, you'll see intraday excursions below the mid-bb but closing always seemed to be above. With any luck, Friday's bounce will be our beginning of a price recovery.

    For the week, TSLA closed at 1417.00, down 83.84 from last Friday's 1500.84. It's been a wild week with an intraday ATH of nearly 1800 on Monday, an excellent ER on Wednesday, a Moody's upgrade, tons of price target upgrades, and two stinker trading days on bad macros. Better days lay ahead.

    Conditions:
    * Dow down 182 (0.68%)
    * NASDAQ down 98 (0.94%)
    * TSLA 1417.00, down 96.07 (6.35%)
    * TSLA volume 19.4M shares
    * Oil 41.14
    * Percent of TSLA selling tagged to shorts: 39.8%
     
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  4. Papafox

    Papafox Active Member

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    So, you may be asking yourself, "is papafox looking like a drowned rat at present?" I'm pleased to state "No", and here's why. Years ago I saw a massive hurricane head straight toward 14,000 ft. Mauna Loa and Mauna Kea on the Big Island of Hawaii, get it's okole kicked, and it emerged as a puppy. Today, the 10,000 ft. mountain on Maui, Haleakala, gave Douglas the shoulder as it marched by, and Douglas at that point veered slightly to the north. Thus, as you can see from the image below, Douglas is passing harmlessly north of Papafox's den in Kailua. You gotta love a Hawaiian mountain with attitude.

    As with Tesla, I rely on my own observations rather than trusting the media for updates. How could it be that the media was still issuing these dire warnings even after it became clear that Douglas had left the neighborhood? All I had to do was think of the media as CNBC and Douglas as Tesla, and it became crystal clear. The media will emphasize the negative in order to put together a more dramatic story. They want you glued to the TV. Once I had that figured out I jumped on the computer and began writing my daily post. Cheers!

    douglas 2.JPG
     
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  5. Alphacrux

    Alphacrux Member

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    Thank you, Papafox, from those of us who have been HODLing for years. One additional item to look forward to by the end of the year is the FSD rewrite currently in Alpha. You may remember that all of ARK’s higher priced scenarios, $15K and above, were all dependent upon robotaxis. If the market suddenly realizes that FSD is not 10 years away but merely dependent on “the march of the nines”, we may get an additional nice bump in valuation.
     
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  6. Papafox

    Papafox Active Member

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    #3166 Papafox, Jul 27, 2020
    Last edited: Jul 27, 2020
    jul27chart.JPG
    TSLA chart above
    jul27qqq.JPG
    QQQ chart above

    Monster Monday III anyone? TSLA came roaring back today, thanks in part to a strong NASDAQ. Our friend the mid-bollinger band helped us out again, and TSLA built upon Friday's bounce off the mid bb to retake ground lost on Friday. Volume was relatively light for this big a move, at 16 million shares.

    Morning trading was relatively weak as traders weren't really sure if TSLA had found its bottom from the recent two days of swan dives. In fact at 11:37am TSLA was only about $5 above Friday's close. The bird of fortune smiled upon TSLA longs, however, as QQQ began a steamroller climb upwards, towing TSLA along with it but at a 5X multiplier. Really, we're seeing the usual pattern repeat itself. If TSLA begins relatively low and starts climbing as the day continues, particularly with support of rising macros, then it's a scenario that likely won't be manipulated and will end well for us longs.

    Shortly after 2pm TSLA crossed 1500 after some effort and traded relatively level for about 35 minutes. You guessed it, the usual suspects wanted to see TSLA settle at 1500 and begin another long plateau, but hungry longs now feeling FOMO would have nothing to do with the plan, and once TSLA surmounted 1500 it climbed steadily throughout the day. A hefty 688K shares traded in the final minute of market trading, and I see a 144K trade in after hours that brings the final minute and pre-arranged trades above 800K today.

    In after-hours trading, you can see QQQ rising slowly. Futures are positive as I write, so we may see another positive macro day on Tuesday. If so, this would bode well for another day of climbing for TSLA.

    I think today was really all about establishing the bottom of the profit taking. Once the NASDAQ started its steady climb, there was nothing the market makers and hedge funds could do to hold TSLA back because all those traders and investors who decided to play the dip were busy buying back into the stock this afternoon.

    Check out this post by @The Accountant in yesterday's main thread (which I hadn't seen when I wrote last evening's post). His preliminary calculations for Q3 include 145K deliveries, $490m GAAP Profits, and $736 non-GAAP profits, numbers that could surely send Gordon Johnson to the hospital with heart palpitations. Last quarter, @The Accountant and Rob Maurer were both close on the Q3 GAAP profits number, with the actual number coming out somewhere in between. Let's see how the two do on Q3 numbers. Similarly, we normally see Troy a little low on the quarterly deliveries and Rob Maurer a little high, so again we can try bracketing between the two and I bet we come out fairly close.

    In this youtube video by Solving the Money Problem, we get a great clip of billionaire investor Chamath Palihapitiya confirming and expanding upon what Elon Musk has already said, which is that there's so much information readily available out there that retail investors are doing a better job of understanding Tesla than the paid analysts. Quarter after quarter we continue to do so.

    Where do we go from here? There are several possible scenarios. If sentiment remains positive as in the leadup to the Q2 P&D report and ER, then I think we'd see a series of plateaus and breakouts as before. Looking at the tech chart, the couple of days leading into the earnings report were trading in the 1600 area, and so that might be a place where buying trails off enough so that the usual suspects can cap for a plateau. We would then see a breakout when news brings forth the catalyst.

    Another possibility is that TSLA will drift with the NASDAQ for a while. I don't expect these 5X multipliers to continue, primarily because today and the previous two trading days were exaggerated movements related to the Q2 ER.

    Still another possibility is that TSLA rises after finding its profit taking bottom as investors start pricing in the good news from the earnings report.

    jul27tech.png
    Throughout this climb from the coronadip, TSLA has remained within the mid to upper bollinger bands, with the exception of strong climb days when the upper bb was chasing TSLA and not far behind. Check out both today's trading and Friday's on the chart and you can see what powerful support the mid-bollinger band has been.

    On a personal note, it's a beautiful blue-sky day here in Hawaii.

    Conditions:
    * Dow up 115 (0.43%)
    * NASDAQ up 173 (1.67%)
    * TSLA 1539.60, up 122.60 (8.65%)
    * TSLA volume 16.1M shares
    * Oil 41.68
    * Percent of TSLA selling tagged to shorts: 41%
     
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  7. Papafox

    Papafox Active Member

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    jul28chart.JPG
    TSLA chart above
    jul28qqq.JPG
    QQQ chart above

    Keep in mind today when comparing TSLA and QQQ charts that movements on the TSLA chart are about 3X what you see on the QQQ chart. For example, the QQQ dip just before 10am was about half a percent of a dip from minutes earlier, while the TSLA icicle of that same time was a dip of about 4 times that amount over the same time period.

    Today TSLA suffered through negative trading of the NASDAQ, with a large dip after 2pm. Two trends are emerging. First, when macros are heading upwards, TSLA heads upwards at an even faster pace. For this reason, TSLA climbed into the green twice near noon but QQQ never touched green on Tuesday. When the Nasdaq sinks, TSLA sinks faster. I think part of the explanation is FOMO and FOF (fear of falling). Secondly, TSLA often outperforms QQQ in the morning and then sinks noticeably below in the afternoon. I attribute this afternoon bias to the lower volumes, which makes manipulations less expensive.

    Overall, TSLA seems to be drifting at an exaggerated rate with the macros at present, both up and down. Most tech stocks were down less than 2% today. With no major catalyst planned before the Sept 22 battery day, TSLA is more susceptible to market forces than before the Q2 ER. OTOH, take a look at the tech chart and you'll see that the mid-bollinger band continues to climb quickly. So far, the mid-bb has been excellent support, so let's see if we can ride the mid-bollinger band up for a while. In the meantime, every day is one day closer to S&P 500 inclusion. Tick, tick, tick.

    In news:
    * TSLA took a hit in pre-market trading as Bernstein analyst Toni Sacconaghi downgraded the stock from market perform to underperform.
    * Reuters reports that Tesla is hiring in Shanghai as production ramps higher.
    * Standard & Poor's raised Tesla's credit rating from B- to B+ today. I consider this move a vote of confidence by S&P.

    jul28tech.JPG
    Looking at the tech chart, notice how TSLA tends to close above the mid-bollinger band and it continues to rise at a brisk rate.

    Conditions:
    * Dow down 205 (0.77%)
    * NASDAQ down 134 (1.27%)
    * TSLA 1476.49, down 63.11 (4.10%)
    * TSLA volume 15.8M shares
    * Oil 41.13
    * Percent of TSLA selling tagged to shorts: 40%
     
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  8. Papafox

    Papafox Active Member

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    #3168 Papafox, Jul 29, 2020 at 7:54 PM
    Last edited: Jul 29, 2020 at 8:05 PM
    jul29chartred.JPG
    TSLA chart above
    jul29qqq.JPG
    QQQ chart above

    Anyone who has been paying attention understands that the stock was manipulated today to close near 1500 (it was 89 cents low). The question at hand is whether the manipulators are market makers and hedge funds looking to pin at 1500 for Friday's close (it makes some sense since below 1500 is the Put zone and above 1500 is the Call zone) or whether something bigger is afoot.

    There's evidence that suggests that Tesla is getting ready to raise more money with an equity offering and this pinning at 1500 is designed to make the price attractive to a wide range of buyers. We've seen Tesla employ Goldman Sachs and Morgan Stanley for this purpose before, and their traders were able to absolutely nail the price target prior to the equity raise. A close today so close to 1500 suggest these same traders are involved and they're just showing off their manipulation skills a bit. Evidence for this second explanation includes:
    * Low volume of 9.4 million, suggesting that the profit taking is done and few investors are willing to sell shares at this price. Normally you would see upward movement of the stock price on such a low volume day with macros rising during the day.
    * March downs of all upward excursions. Take a look at the noonish high. The TSLA price decreased with the QQQ decline, but then QQQ rose while TSLA began a slow march back down to 1500. The same thing happened with the 2:30pm high. TSLA marched down with the QQQ drop, but in much bigger numbers. When QQQ started rising again for the end of the day, TSLA was capped for the 1500 close. The market makers and hedge funds are seldom so successful at reining in TSLA on a positive macro day.
    * Morgan Stanley raised price target to $1050 today, with $2500 bull case

    The idea many of us hold is that if Tesla will be doing an equity offering, it will be for a large amount. A lot of big funds would like to get in before the S&P 500 inclusion goes through. OTOH, perhaps Tesla is communicating with S&P and the offering is timed to coincide with S&P500 ETFs being notified of the coming TSLA inclusion, which would greatly expand the field of participants. There's no way the offering would be large enough to satisfy all the potential buyers who wish to keep up with the S&P 500 in their funds (and therefore need to buy TSLA), so you would think there'd be a price rise of TSLA after the equity offering is complete.

    Anyway, we should learn soon enough on the questions of a cap raise and on S&P500 inclusion.

    In news:
    * PG&E and Tesla break ground on enormous energy project
    * Barron's (quoting Gary Black) Tesla may be 'mind boggling cheap' at $1500


    jul29ihor.png
    Looking at Ihor Dusaniwsky's latest chart, with S&P500 inclusion coming, shorts continue to cover.

    jul29tech.png
    Looking at the tech chart, you can see that TSLA is staying above the mid bollinger band, so that it could close at 1500 on Friday and still be above the band. Notice in the volume bars how often large runs higher followed positive days with low volume.

    Conditions:
    * Dow up 160 (0.61%)
    * NASDAQ up 141 (1.35%)
    * TSLA 1499.11, up 22.62 (1.53%)
    * TSLA volume 9.4M shares
    * Oil 41.27
    * Percent of TSLA selling tagged to shorts: 37%
     
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  9. JeffreyY

    JeffreyY Member

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    Papa, thanks for this very interesting post! The 10Q was recently posted and did not include a capital raise, so this would seem to point to a raise tied to S&P inclusion as Gary Black mentions is to "add liquidity" but has the secondary effect of shareholder dilution. However, the net is that Tesla may be able to wipe out some of it's debt.
     
  10. Papafox

    Papafox Active Member

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    I wasn't really expecting a capital raise from Tesla, either, but Wednesday's trading sure looked like GS and MS were involved.

    We may get a chance on Thursday to see what kind of influences are working on Tesla's price. Nasdaq futures are this evening down about 1%, so chances are we'll see an off day for the market on Thursday. Will Tesla hang tough, will it dip 1%, or will it dip at a much higher multiple? I don't know the answer, but what happens will help clarify who was behind TSLA's unusual trading on Wednesday.
     
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  11. JeffreyY

    JeffreyY Member

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    Got it. Will keep and eye out. Pre-market is negative so far but on very small volume.
     
  12. Papafox

    Papafox Active Member

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    jul30chart.PNG
    TSLA chart above
    jul30qqq.PNG
    QQQ chart above

    So... the plot thickens. Today we saw lots of icicles in TSLA trading, suggesting price manipulations. Moreover, we saw no less than six instances of whack-the-mole as TSLA dared to stick its head into the green on a day when someone really wanted to keep it around 1500. What I find most interesting is that in after-hours trading when Facebook, Amazon, Apple, and Google all beat on earnings, QQQ and the rest of NASDAQ tech companies ran higher on expectations of tomorrow's NASDAQ bump, but the manipulators managed to keep TSLA down or about even until just a few minutes before the 6pm chart cut off (TSLA did manage a 1% gain when nobody was looking between 6pm and 8pm).

    Volume at 7.6 million shares today was particularly low. That volume to me suggests few investors are selling as S&P500 speculation rises but someone is clearly capping the stock price to keep TSLA near 1500.

    I continue to believe that someone other than the usual hedge funds and market makers is doing this capping of TSLA. Whereas the usual suspects like to do dips into market open, a big mandatory morning dip and a dip into close, these manipulators do more of a full-court press. The capping in after-hours trading when every NASDAQ tech stock was rising was really something special, sort of whipped cream with a cherry on top. As for the pushdown into close in the final minutes, I suggest this was a way to keep the manipulations from appearing too flagrant. Two days of closing with a dollar of 1500 would be hard to miss, even by an SEC that apparently needs a seeing eye dog. With TSLA right now, it's always easier to ease off and allow it to rise than it is to try to get the stock price back under control when it makes a strong run upwards.

    Notice the trajectory of the QQQ trading today. A low start and then a transition into the green about noon is a perfect setup for TSLA to launch into a nice climb. It fits one of the patterns. Instead, we saw a push lower with several selling flurries to keep TSLA in the red and discourage a rally.

    Because of the continued differences in style of manipulations, I continue to suggest that maybe some type of capital raise is coming and the seller investment banks are getting TSLA price settled near 1500 before the announcement is made and price is set.

    jul30tech.png
    Looking at the tech chart, the mid bollinger band stands at 1478, and so the distance between the stock price and the mid-bollinger band continues to shrink. This continued stability in the stock price is causing the upper and lower bollinger bands to head toward the mid, thus providing some dampening effect if a large stock movement erupts.

    The good news for us longs is that this manipulated plateau at 1500 continues to cement TSLA's position about halfway between 1000 and 2000 and sets TSLA up for another nice climb when the timing is right. The price 1500 is starting to feel low to many investors, which is a good thing. The unwillingness of investors to sell many shares (low volume) at this artificial price point also bodes well for future rises in the stock price.

    Conditions:
    * Dow down 226 (0.85%)
    * NASDAQ up 45 (0.43%)
    * TSLA 1487.49, down 11.62 (0.78%)
    * TSLA volume 7.6M shares
    * Oil 40.26
    * Percent of TSLA selling tagged to shorts: 37%
     
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  13. Papafox

    Papafox Active Member

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    jul31chart.JPG
    TSLA chart above
    jul31qqq.JPG
    QQQ chart above

    As the week progressed, I noticed a much heavier hand of manipulation than normal with TSLA stock price. It was reminiscent of the Goldman and Morgan Stanley cap raises for TSLA when their traders held TSLA steady for days as the salesmen lined up buyers. When TSLA traded at a pegged 1500 for two days in a row, I had a deja-vu experience. Alas, Friday's trading proved the manipulators had an entirely different aim in mind, so please forgive me for suggesting a cap raise. Instead, I think we were seeing upward pressure on TSLA and capping at 1500 until just minutes before close on Thursday, when the downward push began.

    What we saw on Friday is very similar to recent manipulations. When the NASDAQ is heading down, TSLA heads down too, but at a greatly exaggerated multiple.When the NASDAQ (or QQQ) bottoms out and starts climbing, TSLA is capped. Check out that 2pm until close cap of TSLA, it's a real classic example. No bad news justified TSLA's weak trading as the week progressed. Instead, we saw investors pretty much just hanging onto their shares with volume a mere 12.3 million shares on Friday and easy pickings for manipulators, particularly in the afternoon hours when so much of the mischief takes place.

    Fortunately, when such manipulations are underway, you can typically just wait them out. We likely have S&P500 inclusion coming soon, Battery Day will dazzle in September, and Q3 will set records. The revenues Tesla will generate with four vehicle factories producing will amaze the skeptics.Stick around for the fun.

    jul31maxpain.png
    So, why did the manipulators push hard on Friday to take TSLA down into the low 1400s? Looking at the chart above, the call spikes between 1500 and 1430 don't look that big. Think again. Once call buyers figured out that the market makers and hedge funds were targeting investors who bought calls with even hundred strike prices (1400, 1500, etc.), they began diversifying their strike prices to make themselves less of a sitting duck. I believe Friday's close was a successful attempt to go after the odd-strike buyers and teach them a lesson. How many calls expired this Friday with strikes below 1500 but above or equal to 1430? Let's take a look:
    Strike Quantity of calls
    1495 553
    1490 734
    1480 442
    1470 382
    1465 304
    1460 2852
    1450 944
    1440 382
    1430 1134
    Total 7727

    That's an equivalent of more than 700,000 shares that managed to see a move from in the money to out of the money plus a permanent haircut of some $56 apiece or a reward to the options sellers of over $39 million for just those calls. If the manipulators were successful at covering before end of day, their strategy of selling high (opening short positions in morning) and buying low (covering those shorts in the afternoon) the manipulation would be profitable in and of itself, never mind the bonus from changes in values of call options.

    jul31astro.JPG
    The safe return of Astronauts Doug and Bob on Sunday could possibly give a boost to TSLA on Monday. The launch of these astronauts to the ISS brought a nice climb to trading on Monday, June 1, after a Saturday launch. Back then, TSLA had been trading in the low 800s (back in the olden days, 2 months ago) for three weeks before breaking out on Monday and climbing to nearly 900. Hard to imagine this was only two months ago.


    jul31tech.png
    Looking at the tech chart, one of the most noticeable changes has been the radical tightening of both the upper and lower bollinger bands. Also notice that Friday's trading was the first time since April when the stock closed noticeably below the mid-bollinger band. Such a close might signal an effort of manipulators to push lower on Monday in an effort to artificially generate concern among technical traders, so be aware.

    For the week, TSLA closed at 1430.76, up 13.76 from last Friday's 1417.00. All four of the previous Mondays have shown strong openings. In three of the four, TSLA closed up more than 120. In one, TSLA began strong, but falling macros (along with some manipulation) allowed a close slightly in the red. Will it be Monster Monday IV or Manipulation Monday? A monster Monday could overpower the manipulations but a weak Monday could lead to more of the same. Stay tuned and have a great weekend.

    Conditions:
    * Dow up 115 (0.44%)
    * NASDAQ up 157 (1.49%)
    * TSLA 1430.76, down 56.73 (3.81%)
    * TSLA volume 12.3M shares
    * Oil 40.27
    * Percent of TSLA selling tagged to shorts: 41%
     
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  14. Papafox

    Papafox Active Member

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    aug3chart.JPG
    TSLA chart above

    aug3qqq.JPG
    QQQ chart above

    Welcome to Moderation Monday. A $54 climb shouldn't normally be something to sneeze at, but with $120 and above climbs on Monster Mondays the norm lately, today's $54 climb felt somehow milktoast, especially in light of what you know who has in mind for the stock later this week. Today's trading showed attempts to climb through 1500 that were all foiled by the cap. A pushdown leading into 2pm happened without any news or macro dip, thus continuing the capping and afternoon pushdown scheme of the past few weeks. A climb of $54 on volume of only 8.8M shares is impressive, but it also suggests a low volume environment that is easy to manipulate.

    To be fair to the pirates engineering TSLA's trading patterns, let's take a moment and consider the possibility of explaining these trading patterns through a large stakeholder deciding to trim shares. It's possible, right?
    * Weekly patterns- A large investor doesn't sell lightly on Mondays and then increase the selling as the week progresses.
    * Daily patterns- A large investor doesn't defend a price such as 1500 by selling as heavily as necessary when the stock price approaches it from below. Rather, they might moderate their selling and allow the stock price to creep higher, draw in more buyers, and thus pave the way for selling shares at an even higher price. Further, a large investor doesn't emphasize late afternoon for trimming shares and artificially depress the stock price going into close when the same selling could take place during brisk trading morning hours without extracting such a toll in the stock price.

    Bottom line: the most plausible explanation continues to be that hedge funds are profiting by tempting call buyers to place their bets on Mondays as the stock price soars, ensuring those weekly call options fail to pay off by depressing the stock price come Friday, and profiting by pushing down the stock price in the afternoons with short-selling and then covering at a lower price later in the afternoon. It's a profitable enterprise, there is no SEC minding the store, and so it continues until S&P500 inclusion or other substantially positive news breaks the pattern and the plateau gives way to a hefty climb, as we've seen throughout the 2020 rally.

    Coronavirus update
    The chart immediately below suggests that the second wave that the United States has been suffering through has peaked and is in decline. The Florida chart below it is representative of states such as Texas, Florida, and California which were in the news a couple weeks ago but have now peaked and are in decline. As I mentioned months ago, some states will see the virus get away from them, they'll need to readjust their rules, and they will once again get the virus heading lower, which is exactly what we're seeing. My biggest hope right now is that we see positive results with the various antibody therapeutics that could greatly lessen the number of deaths from those who are hospitalized with the virus, until vaccines arrive at year end or early in 2021. Several of those therapeutics are in Phase 3 human trials now, and we could hear good word about the trials at any time. Unlike vaccines, where a bad vaccine can have significant negative consequences on the population as a whole if it is released too early, therapeutics based upon lab-grown antibodies could initially be primarily used for the most seriously ill patients in hospitals. For these patients, the risk vs. reward ratio of using the therapeutics could be exceedingly high, and consequently I would not be surprised to see these therapeutics released much earlier than vaccines for combating active COVID 19 cases.

    aug3corona2.png
    aug3florida.png

    aug3tech.png
    Looking at the tech chart, today's rally brought TSLA closer to, but not above (at closing) the mid-bollinger band, which stands at 1495. Another plateau has formed in the vicinity of 1500 and it'll be interesting to see how long that plateau exists before being disrupted in a major way.

    Regarding strategies, I know a few traders who are selling some shares at peak Monday prices and then rebuying on Friday. The main issue with this plan is that if the S&P500 inclusion is announced for TSLA, or other positive news comes forward, those practicing this trade would see a smaller gain if the stock price appreciates significantly.

    Conditions:
    * Dow up 236 (0.89%)
    * NASDAQ up 158 (1.47%)
    * TSLA 1485.00, up 54.24 (3.79%)
    * TSLA volume 8.8M shares
    * Oil 40.74
    * Percent of TSLA selling tagged to shorts: 37%
     
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