Papafox's Daily TSLA Trading Charts

[Papafox]

TSLA chart above

QQQ chart above

Let's get through market trading quickly so that we can concentrate on the 5:1 split/dividend today. For the third day in a row, the NASDAQ (and QQQ) closed lower. The NASDAQ has been underperforming the Dow during this time as investors continue to reallocate funds to more risky stocks that didn't do well earlier in the recovery. Thus, tech-like stocks (including TSLA) have seen some outflow, which along with general macro weakness (and some manipulations in TSLA's case) has led to some red ink days.

TSLA was hit with a strong Mandatory Morning Dip (MMD) right after opening today as hedge funds made an effort to advertise that TSLA is not where you want to be for day trading profits. The QQQ dip right after open was about 0.8% which TSLA's was about 3.2% or roughly 4X higher. Around 1pm both charts showed recovery to the red/green line, but the NASDAQ sank heavily into close and TSLA followed it down. TSLA actually showed a lower multiple going into the close with TSLA down about 3.1% at close while QQQ was down about 1.9% or roughly a 1.6X multiple. That lower multiple for TSLA at close today suggests that TSLA is gaining relative strength at this lower stock price.

At about 5pm Tesla announced a 5:1 stock split that is technically a dividend. We'll hear more about the differences between the two but the net result is roughly the same as TSLA shareholders receive 5X the number of shares previously held and the stock price decreases over the Aug29-30 weekend so that when things reopen Monday morning the price action starts out at 1/5th the closing price. In theory, the value of your shares remains the same, but we saw a nice run up with the announcement, so let's take a look at some advantages of $300/share TSLA vs. a $1500/share TSLA.

* The stock is more affordable for purchase per share and that extra affordability could positively affect ownership by young retail investors. Moreover, the stock "seems" like it is a better deal at this price and the experience of AAPL and other stocks that have split shows a measurable positive effect upon the value of stock owned over the short term.

* Options become affordable again for many retail investors. I remember paying $6K for a $400-strike leap that I bought back when TSLA was trading in the 300s. That was the price for a near-the-money leap back then. Today, if I wanted to buy a $1400-strike call option for a similarly long period, it would cost me over $50,000. A lot of investors can't afford to pour $50K into an option, which is definitely riskier than buying stock. After a 5:1 split, however, that near the money leap should cost more like $10,000, which makes it feasible for a greater number of investors to trade with options again. As more call options are bought, the amount of delta-hedge buying the market makers need to make increases as well.

* Today's news changes TSLA's momentum, and TSLA is very much affected by momentum. For weeks TSLA was becalmed in the Wall Street duldrums, not moving much. As the NASDAQ started trading a bit lower this last week and we saw negative macros on Monday instead of the usual positive, TSLA lost ground this week. Low volume allows the afternoon manipulations we've seen frequently lately. Now volume has picked up in after-hours trading today, so the manipulations will definitely be more difficult for the hedge funds to pull off. A $94 swing in price between market close and after-hours close is likely going to carry over positively into Wednesday morning's trading, and the market-makers will have to delta-hedge (buy shares, in this case) to account for the positive after-hours change in price. This adrenaline injection couldn't have happened at a much better time.

* The calendar is filling up with positive catalysts. We see this split/dividend effective August 31 but will see positive effects on Wedneday. Then there's battery day in September and Q3 Production and Deliveries Report about 10 days later, followed by the Q3 ER later is October.

Do you trade with options? Everything should be fine. Here's a link I found on the main investor's thread that shows Fidelity talking about how Splits and Stock Dividends affect options contracts. The bottom line is that your number of contracts increase by a factor of 5 and your strike price is reduced by dividing that number by 5. Here's the fidelity link.

Looking at the tech chart, you can see that the stock price has been sitting right on the lower bollinger band lately. Time for that situation to change!

Conditions:
* Dow down 105 (0.38%)
* NASDAQ down 186 (1.69%)
* TSLA 1374.39, down 44.18 (3.11%)
* TSLA volume 7.3M shares
* Oil 41.66
* Percent of TSLA selling tagged to shorts: 39%

 

[Papafox]

I forgot to mention that if you look at the QQQ chart, you can see a nice lift after hours about 5pm. It's possible that was caused by a QQQ stock reporting earnings after hours, but if not it could be because the the nearly $100 rise in TSLA giving QQQ a boost. The timing is exactly right for it to be a TSLA effect.

 

[LisaW]

Thanks for sharing your insights!

 

[Angel007]

I forgot to mention that if you look at the QQQ chart, you can see a nice lift after hours about 5pm. It's possible that was caused by a QQQ stock reporting earnings after hours, but if not it could be because the the nearly $100 rise in TSLA giving QQQ a boost. The timing is exactly right for it to be a TSLA effect.

Thank you for your valuable and much appreciated insight!

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA didn't disappoint Wednesday with a $180 climb during market hours and an addition $9 climb in after-hours trading. Judging by the AAPL announcement of a split, most of TSLA's rise due to the announcement has likely occurred today but there will be a bit more if the trend holds for TSLA. This rally is because investors believe the split will produce an announcement pop plus positive results after the effective date of Aug 31, so we should see positive trading trends related to the lower stock price pop up on and after that date. We also have seen a reset of the momentum. Instead of sliding downward, TSLA showed a big jump upwards today, which excites buyers and screws up the careful planning of certain option sellers turned manipulators.

If you look at the percentage of selling by shorts chart, you can see that number jumped up to 44% today. My thought is that the extra effort in using day-shorting as a manipulation tool took place primarily in those instances where TSLA departed from the trends of QQQ. For example, QQQ nicely rose right after market open, but TSLA actually lost ground for the first 20 minutes. Translation: this is the best the manipulators could do toward creating a Mandatory Morning Dip. When that effort failed, we saw a rally as a response.

Remember that the manipulations we've seen lately are "A Team" quality, and so TSLA defeated even the best today. The second major effort of manipulation likely occurred as TSLA approached 1500. First we see a bounce off 1500 and then we see prolonged plateauing at 1500 as QQQ continued to rise. Alas, the extra TSLA volume of today plus the macro strength enabled TSLA to bust through 1500, and once that was accomplished convincingly to run much higher.

The strong climb leading into the 2:23pm high of 1583 was a bit overheated, which gave manipulators a chance to get a little downward momentum going, which lasted an hour. That was the best they could pull off today.

In extended after-hours trading, TSLA gained another $9; suggesting some positive momentum will be carried into Thursday's opening.

Looking at this Friday's max pain chart, there are currently over 4700 1500-strike call options expiring Friday. It makes sense for the sellers to put up resistance to seeing these calls move into the money. The next big call strike is 1600, where nearly 5,400 calls reside. That level might be more easily defended.

TSLA shorts were tagged with 44% of TSLA selling on Wednesday, suggesting an extra effort to bring this monster climb day under control.

Looking at the tech chart, you can see that today's rally brought TSLA's closing price midway between the upper and mid bollinger bands, so we're going to get a chance to see if the stock price will remain within these confines.Meanwhile, the 50 day moving average (in blue) is storming upwards and when it reaches the lower bollinger band this should make for some nice support, if needed.

For Thursday, keep in mind that at least with the AAPL announcement of a split, the first full trading day afterwards was by far the strongest. Wednesday's trading included both high volume (21.9M shares) and a QQQ that rose steadily in the morning and mostly held onto its gains throughout the afternoon. It was a great setup for the split announcement to gain maximum effect. The biggest threat to Thursday's trading would be too great of an initial climb after opening, followed by a macro retreat, which would pave the way for the manipulators to profitably pull the stock price down.

Anyway, congratulations longs on a strong day and news that will help TSLA's trading with small investors once August 31 arrives. We've regained lost ground as we wait for the S&P500 inclusion announcement. Tick, tick, tick.

Conditions:
* Dow up 290 (1.05%)
* NASDAQ up 229 (2.13%)
* TSLA 1564.76, up 180.37 (13.12%)
* TSLA volume 21.9M shares
* Oil 42.57
* Percent of TSLA selling tagged to shorts: 44%

 

[Papafox]

TSLA chart above

QQQ chart above

The market smiled kindly upon TSLA today with benign macros (Dow down a bit more than 0.25% and NASDAQ up by a similar amount). Right on cue, the Mandatory Morning Dip began shortly after market open. When it was defeated before TSLA could run into the red and then it regained 1600, FOMO set in and we saw another nice run higher. Notice throughout much of the day that TSLA was capped and unable to capture 1650. If you look at the chart below you'll see quite a few 1650 calls expiring on Friday and so the hedge funds and some market makers are inspired to keep TSLA below 1650 tomorrow.

Why did TSLA fade a bit in the afternoon? Most of the fade was related to a dip of the NASDAQ. QQQ started down around 1pm and lost all of its 1% gain by 2:52pm, at which time it hesitated then started regaining a quarter of its daily increase before close. In contrast, TSLA was up more than 6% when the dip began and bottomed out before 3pm still up about 3%, for a 3% loss to QQQ's 1%, or a 3X response to the macros, a number that is a bit high and was likely helped a bit by some day short-selling by you know who. Sometimes when TSLA is in steamroller mode the delta-hedging needed is so great that there's no stopping the steamroller, but since TSLA had leveled off for the better part of 3 hours, quantity of options to delta-hedge aren't as great as in earlier days, and a 95 point climb on a 20 million share volume day isn't as intense as what we've previously seen, the market makers were likely caught up with delta-hedging when the macro dip began and weren't in need of continued buying.

Why so much strength today? Part of the answer might be a carry-over from yesterday's buying in anticipation of the stock split. One longshot possibility is that S&P has shared word of a Tesla inclusion in the index and we were witnessing the beginning of the accumulation of TSLA by the various indexes before the announcement is made public. If that explanation is true, then we'd likely see continued strength in TSLA trading in a few more coming days before the decision is made public. A more likely explanation is that there was some good news about Tesla propelling the buying, and I'll talk about that possibility below the options chart.

Today's options chart from maximum-pain.com shows a really expensive accumulation of calls with 1600 strikes that expire on Friday, some 8,000, but take a look at the strikes not that much higher. Both 1630 and 1640 each have over 1800 expiring and the 1650 strike shows over 4,000 expiring Friday. Option sellers who haven't been delta-hedging would be in for a world of hurt if TSLA just keeps climbing on Friday.

The possible good news helping TSLA today might have been Morgan Stanley communications. The firm raised its price targets for TSLA as follows:
Bear Case: 375 to 510
Base Case: 1050 to 1360
Bull Case: 2500 to 2636
Upgraded from underweight to equal weight

The justification for these increases was that apparently Adam Jonas has realized how dramatic a change in the EV battery world is coming when Tesla implements the technologies they're likely to announce on Battery Day, Sept. 22. These changes include the manufacturing and cost benefits of DBE (Dry Battery Electrodes) from the Maxwell acquisition, million mile battery technology from Jeff Dahn's work, higher energy density (better range) and the means to efficiently manufacture their own batteries. Applicable pages from the note can be seen from this Tweet. Morgan-Stanley went so far as to downgrade other battery manufacturers because of the threat posed by Tesla. When word became widespread about the Morgan Stanley note, we saw a big pop in the TSLA stock price after 5:10pm (see top chart). Some of that pop should carry over into Friday's pre-market and opening prices for TSLA.

The net effect of today's announcement is that we have multiple positive catalysts bouncing around out there right now. Battery Day is finally receiving the kind of recognition it deserves. S&P 500 inclusion is likely coming. The stock split is still having a positive effect, and Q3 should be the best quarter by a good margin that Tesla has ever had. For all these reasons there's upward pressure on the stock price right now. Because Friday is options expiration date and because there's already been a big jump upward this week, the usual suspects will be looking for every possible opportunity to minimize the stock price come 4:00pm Friday. Don't miss the drama!

Dusaniwsky adds color to the short-seller situation in the two images above

Gary Black is a very knowledgeable Wall Street veteran and a Tesla advocate. Here's his speculation regarding S&P 500 inclusion.

Looking at the tech chart, this week TSLA has bounced along the top of the lower bollinger band, straddled the mid band, and the snugged up against the bottom of the upper band. As the 50 day moving average approaches the lower bb, we'll see a nice formation of support, if its needed.

From the desk of Papafox

Conditions:
* Dow down 80 (0.29%)
* NASDAQ up 30 (0.27%)
* TSLA 1621.00, up 66.24 (4.26%)
* TSLA volume 20.0M shares
* Oil 42.38
* Percent of TSLA selling tagged to shorts: 44%

 

[FireMedic]

Very thorough. Hadn’t seen the cause for the 5:10 bump, that’s very exciting. Nice touch with the ‘Rona...Well deserved! Cheers to the longs

 

[Papafox]

TSLA chart above

NASDAQ market-trading only hours chart above (NASDAQ extended hours chart was gorked today)

TSLA shorts were tagged with 46% of selling on Friday

Congratulations longs, TSLA managed a new ATH closing price of 1650.71 today. As I predicted on Thursday, today we'd see battling forces between good news for TSLA (continued split momentum, Morgan-Stanley upgrade, upcoming S&P500 inclusion, etc.) vs. downward forces from manipulators on option-close Friday, with 1630, 1640, and 1650 strike call options very much in play. The NASDAQ moved lower shortly after open, which gave an edge to the manipulators today.

Looking at the TSLA chart, you can see TSLA exceeding 1680 before edging lower toward market open. As the NASDAQ dipped around 10am, so did TSLA, and as it recovered the prolonged game of whack-the-mole began in an effort to keep TSLA below 1650. If you look at the TSLA chart the strategy looks very clear. Such a controlled trading day discouraged excess buying and volume barely reached 12 million shares, which made the manipulations all the easier for the option sellers.

Shortly after 3pm, the NASDAQ took a dip and TSLA made an exaggerated dip with it. My guess is that the manipulators were seeing if 1600 might be possible. Alas, the NASDAQ dip leveled, and TSLA began a quick recovery, well ahead of the NASDAQ's recovery. This is the type of late afternoon dip when I really like to buy shares in anticipation of positive Monday trading. Alas, I'm not alone and the dip was bought quickly. You can see going into close that TSLA leveled in the low 1640s for a few minutes before pushing up higher to cross 1650. I really think the manipulators would have held TSLA below 1650 except for that last minute jump upward in the NASDAQ. There was a real bump upwards in volume to 50K shares at 3:50pm and then another 25K shares traded in the following 2 minutes, which really gave TSLA a boost. I think this buying, again, was traders positioning for a positive Monday trading session.

TMC member @generalenthu suggest in this post that the manipulations are just a hallucination and that Friday's trading can be better understood by profit-taking on expiring options. I hope to better understand that particular viewpoint. In the meantime, I can say that the we vs. them dynamics works really well for me in understanding what happened and often predicting what will happen next. If I am hallucinating, my banker is happy just the same because the view I currently hold works well for understanding movements. Nonetheless, I'd like to better understand other views and see how well those views predict what will transpire.

It's been a week of good news. Some recent developments include:
* Bank of America more than doubled its TSLA price target (from 800 to 1750) and upgraded from underperform to neutral. This is an important development because BofA has been a perpetual bear regarding TSLA.
* T. Rowe Price, which slashed most of its TSLA holdings in the spring of 2019 is reputed to be adding substantial TSLA holdings again

Looking at the tech chart, you can see that today TSLA closed just a tad under the upper bollinger band and at the highest level ever for this stock. The July 13 run to nearly 1800 produced the highest intra-day price that TSLA has yet achieved, but that day's trading actually closed lower than today's. I think of that run to nearly 1800 the same way I think of the run to 960 not so many months ago. It was too much too quickly, but in good time TSLA retook that high with conviction and at a more sustainable rate of climb.

For the week, TSLA closed at 1650.71, up 198 from last Friday's 1452.71. It's been a good week, my friends. I am looking forward to Monday because today's trading and the need for capping at 1650 suggests that the market wants to price this stock higher. Enjoy your weekend.

Conditions:
* Dow up 34 (0.12%)
* NASDAQ down 23 (0.21%)
* TSLA 1650.71, up 29.71 (1.93%)
* TSLA volume 12.4M shares
* Oil 42.01
* Percent of TSLA selling tagged to shorts: 46%

 

[Papafox]

TSLA chart above

QQQ chart above

Anyone for a close at 1835 for new intraday and closing ATHs? You got it! Welcome to Monster Monday IV.

Today was yet another reminder that one should not underestimate TSLA when it is engaged in a 2013-level breakout. Trying to call the top is extremely difficult as well as expensive if you guess wrong. With multiple positive catalysts still ahead of TSLA over the next two months, there's reason to believe the stock is capable of going higher. With 2021 growth likely to be in the vicinity of 50% (vs. expectations of 25-30% growth), TSLA has plenty of opportunities to surprise to the high side in the year ahead. Dips along the way are inevitable, but if you can survive without reducing your stake, HODL continues to be a rewarding investment strategy with TSLA, particularly for young people.After all, this is a company capable of growing 50% per year for the next 5 years.

So, what set up this climb? In Friday's post I suggested the efforts needed to keep TSLA at 1650 on an options expiration day suggested that the stock wanted to go higher. Part of the pressure comes from expectations that the stock split will help the stock price move higher after the Aug 29-30 weekend. Much of this upward pressure came from analyst upgrades and revelations of new big investors jumping in. The most recent:
* Softbank is adding TSLA shares
* Dan Ives of Wedbush updated TSLA's price target to $2000/share

An additional component of today's TSLA climb was the strong behavior of the NASDAQ. Although the Dow closed lower, the NASDAQ, which is most clearly linked with TSLA-like stocks, gained a full 1% today as it ran uphill with hardly a breather today.

Volume was a modest 20M shares. That's relatively light for a 184 point climb, which meant that the market makers were busy catching up on delta hedging for much of the day, thus giving little opportunity (when combined with strong NASDAQ) for manipulations to derail the steamroller climb. Congratulations to all!

This much strength begs the question: have S&P500 funds been told of TSLA inclusion yet? Today was strong enough, but if volume drops off on Tuesday, then probably not. No word on inclusion would suggest that the inclusion climb is yet to happen. We'll see.

It's always good to step back and see the big picture. This time last year TSLA was in the dumpster, looking at 300 as requiring a healthy climb. How times have changed. Much of the climbing has been a series of climbs interspersed with plateaus. We see the greatly overheated volume of early February when options speculation was driving delta-hedging, leading to even higher stock prices, we see the retreat after that overheated climb, a more sustainable retry at the high 900s, and then the coronvirus V dip and recovery hit. We see the early July run to nearly 1800 on overheated climbing, the retreat, and today the realization of 1800 plus stock price as a more sustainable climb rate conquered that price barrier. Today the lower bollinger band and the blue 50 day moving average have intersected, setting up some nice support. TSLA has climbed way above the upper bb and will likely come within the upper bb within the next two days either through the upper bb continuing to climb and catch up or the stock price dipping back under the upper bb.

What happens next depends to a large extent upon the catalyst for today's climb. If S&P500 funds have just learned this morning of TSLA's coming inclusion, then the short term could contain more climbing. If today's climb was just a reaction to new price targets and word of new big funds buying into TSLA, then the short run could be less spectacular. If you continue to trade and invest on a year or longer time horizon, there's likely plenty of good news yet to come, particularly within the next two months, and so I'd be cautious about thinking you'd be successful timing this stock's ascent. Nonetheless, if you are older, as I am, there's nothing wrong with taking a few chips off the table after new All Time Highs following big moves. For me, that strategy allows the peace of mind to keep the vast majority of my bet intact as Wall Street continues to learn what we've long known about this remarkable company.

Conditions:
* Dow down 86 (0.31%)
* NASDAQ up 110 (1.00%)
* TSLA 1835.64, up 184.93 (11.20%)
* TSLA volume 20.2M shares
* Oil 42.82
* Percent of TSLA selling tagged to shorts: 44%

 

[Papafox]

TSLA chart above

QQQ chart above

It's nice to tag another ATH day onto a Monster Monday. Today the Dow was down a bit but NASDAQ was up as the S&P500 eaked out a new record. Volume was relatively high at 16.5M shares for a nice climb, but certainly not a monster climb day with 51 points gained.

In pre-market trading, TSLA eclipsed 1920 and gave a wink at 2000 before losing ground. My concern for days such as this is that the stock, which is already trading near the bullish analyst price targets, runs too high on opening with no news to support it and becomes an attractive pushdown target for a hedge fund that is looking to make some money day-shorting. Fortunately, the buyers were too numerous and NASDAQ too frisky for such a pushdown to succeed. The Mandatory Morning Dip bottomed out about 10am and after the defeat of the MMD at a price still in the green, TSLA rose and never showed the morning's weakness again throughout the day. Notice that the big QQQ dip occurred later and TSLA was already in recovery mode by that time.

I asked myself today whether it's possible that S&P has told funds yet that Tesla's inclusion is imminent. I think today's trading was too weak for word to already be out, but we'll have a better idea after Wednesday's trading. In the meantime, traders who bought TSLA to play the S&P500 game are likely the source of the selling today (along with normal profit taking and a few short-sellers finally covering).

Today was day 5 of climbing and TSLA has gained nearly $500 during the rally. For these reasons, I think the most likely scenario now would be a down day followed by a formation of another plateau. We'll see.

Looking at the tech chart, you can see the upper bollinger band curving upwards to keep up with the stock price.

Conditions:
* Dow down 67 (0.24%)
* NASDAQ up 81 (0.73%)
* TSLA 1887.09, up 51.45 (2.80%)
* TSLA volume 16.5M shares
* Oil 42.70
* Percent of TSLA selling tagged to shorts: 43%

 

[madodel]

a nice climb, but certainly not a monster climb day with 51 points gained.

You sound like my daughter. When I told her TSLA was up $49 earlier today her response was "Is that all?" Hahahahahaha. Thanks for keeping us all informed.

 

[Alphacrux]

Papafox, thanks as always for your coverage. A few questions, if possible:

• What are your latest thoughts on S&P inclusion this week vs. after split on 8/31?
• If S&P inclusion does not occur this week, what are your thoughts on FOMO vs. MM keeping SP under $1900 on Friday due to expiring put and call options? FOMO appears strong, but we have closed above the upper BB two days in a row now.

I am positioned fine for any scenario, just curious. And congrats to all longs!

 

[Papafox]

Papafox, thanks as always for your coverage. A few questions, if possible:

• What are your latest thoughts on S&P inclusion this week vs. after split on 8/31?
• If S&P inclusion does not occur this week, what are your thoughts on FOMO vs. MM keeping SP under $1900 on Friday due to expiring put and call options? FOMO appears strong, but we have closed above the upper BB two days in a row now.

I am positioned fine for any scenario, just curious. And congrats to all longs!

Regarding S&P500 inclusion timing...
* I've considered the possibility that the robust buying on Monday was related to funds learning of TSLA S&P500 inclusion before a public announcement. Volume of 20M shares and a run higher of 180+ points would fit that sceraio. OTOH, we've already seen 3 Monster Mondays, so there are clearly other possible explanations.
* Tuesday's trading included volume of 16M shares, so the pre-warning of S&P500 inclusion is still a possibility, but reduced volume suggests maybe not.
* A lower volume Wednesday would likely confirm no pre-warning by S&P was shared
* From what I've heard, we'll see strong trading for a few days before the actual announcement, and so I look at unexplained strength to be a clue that inclusion might be coming. Again, there are alternative explanations for this week's rally, however.

Inclusion before or after 8/31 split?
* If I were S&P and I was seeing the TSLA stock price heading higher on word of a coming split, I'd be inclined to let the funds start picking up shares for a known inclusion before the split because at TSLA's current price, a split really could be a catalyst for further appreciation. The flip side of that theory is that S&P is looking at their own issues and certainly isn't as focused on TSLA's dynamics as we are.

FOMO vs. MMs?
* Obviously we see lots of forces that can work together to hold the stock price down on Fridays.
* For other days of the week, high volume and relentless buying can overpower manipulations, but until we get some more news or the completed split to work with, it might be hard to crest the 2000 mark. I look at large, rogue hedge funds as the likely source for early and mid-week pushdowns, with direct profiting from that pushdown as the primary incentive. Such a pushdown becomes unlikely when volume is high and NASDAQ is climbing steadily, but the past two days have really nicely favored TSLA FOMO and weaker trading days could allow manipulations to succeed.

 

[Papafox]

Chart of TSLA above

Chart of QQQ above

To no one's great surprise, the nearly $500 climb we just saw with TSLA has tapered off into a consolidation mode today. TSLA traded stronger than the NASDAQ today, possibly because of news that Panasonic is investing another $100 million to expand Gigafactory 1 production (see this Electrek article). Volume was much lighter today (12 million shares), confirming yesterday's suspicions that S&P hasn't whispered TSLA inclusion in the 500 fund to index funds yet. This is good news because it suggests most of the $500 rise we've seen lately is attributable to word of a stock split and excitement about battery day. The bump from S&P500 inclusion is yet to come.

My expectations are that we're likely seeing the start of another plateau unless strong news (good or bad) or negative macros pulls TSLA in one direction or another. Option sellers profit from a stock price suddenly going stable after a big climb, and I suspect there are forces out there who will help TSLA experience another plateau.

The continued decline of short interest at TSLA continues. Looks like shorts are nearing $24 billion in 2020 losses.

Coronavirus Update

This latest worldometers.info chart shows that the decline in daily new cases within the United States continues. Pay particular attention to the blue (7 day average) line. As long as the trend continues, fears of the virus should not substantially disrupt this market. There will be bumps up and down, it's a rocky road, but no meltdown. My expectations are that additional testing and treatment options, such as $2 COVID 19 rapid test kits, monoclonal antibodies, or a suitable vaccine will become available before the next flu season sends the numbers higher.

Looking at the tech chart, you can see a combination of rising upper bb plus a small dip in the stock price has brought TSLA very close to falling within the bollinger bands after two days, as expected.

Be sure to catch the Tesla Daily video between Rob Maurer and Jim Cramer. I love the video because Rob is one of us, a retail investor who has done a deep, deep dive into Tesla the company and TSLA the stock. We can see from the interchange that Cramer respects Rob's level of knowledge, and this interview just confirms my belief that we retail investors were way ahead of Wall Street in understanding Tesla and that the others are just now starting to catch up.

Conditions:
* Dow down 85 (0.31%)
* NASDAQ down 64% (0.57%)
* TSLA 1878.53, down 8.56 (0.45%)
* TSLA volume 12.1M shares
* Oil 42.51
* Percent of TSLA selling tagged to shorts: 41%

 

[Papafox]

TSLA chart above

QQQ chart above

Anyone for 2001, a Tesla Odyssey today? Congratulations all on Thunderous Thursday!

I was among those surprised by TSLA's strength today. Looking back, though, we had a nice set of circumstances for a frisky climb. For one, the QQQ chart above opened in the red but then jumped into the green early in the morning and climbed mostly continuously throughout the day. The NASDAQ closed up 1.06%, as a result. TSLA spent over an hour stuck at 1895 as the pressure continued to build from the macro climb. Finally, around 10:50am, TSLA cut loose into a splendid climb and never looked back. The third ingredient of a strong climb was the volume after 10:50am. We saw volume as high as 64K/min. Finally, there was the consistency of the buying. No doubt some big dog was buying today and doing it smarly. I'm inclined to believe that the prolonged trading right below 2000 was more likely to be careful management of buying so as to not push the price over 2000 any sooner than necessary. You might have seen some capping pressure, too, as some option sellers (ie market makers and hedge funds) are in deep doo doo if they had not been delta-hedging TSLA prior to its breakout.

Notice how dramatically volume picked up when TSLA broke to the high side after 10:50am. One possible explanation is that you had one big dog buying the stock and then a second jumped in because they wanted some of these below 1900 shares too. That caused too much buying, which quickly bid the price up. As TSLA approached 2000, the buyers moderated to keep it from passing 2000. A little before 2:00pm you see the exaggerated dip of TSLA compared to the QQQ dip. I suspect the usual subjects did a little shorting during that dip to persuade TSLA away from 2000, but it didn't last long.

The lesson of today is that surprises do indeed happen with TSLA trading. After TSLA had a lukewarm day on Wednesday, why was Thursday so hot? If you are in the market when a dip occurs, you can wait it out and return to your previous position. Such an option is often not possible if you are out of the market when a surprise rise comes forth. Again, I deal with this short-term volatility and unpredictability by keeping a trading horizon of no less than a year. It's worked well for me.

In case you think there's no room for TSLA to climb more, I offer this price target from Gary Black, an extremely knowledgeable individual. Tesla could descend with a macro worryfest or it could climb in the short term. Long term, though, with the opportunity for Tesla to grow 50% next year, I see the long-term as attractive for TSLA investors.

Friday should be interesting because normally that's a down day for TSLA but with big dogs rumbling over shares to buy, a carryover from today's trading is possible, as well.

TSLA is moderately above the upper bollinger band again, but with the band's slope this steep, the band should remain reasonably close to the stock price as they both climb skyward.

If you haven't seen this blog post by @FrankSG , I urge you to take a look. It features graphs of shares ownership for the 69 top TSLA holders and gives you an idea of who's accumulating and who's trimming.

Conditions:
* Dow up 47 (0.17%)
* NASDAQ up 118 (1.06%)
* TSLA 2001.83, up 123.30 (6.56%)
* TSLA volume 20.3M shares
* Oil 42.58
* Percent of TSLA selling tagged to shorts: 42%

 

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TSLA chart above

QQQ chart above

Please excuse the delayed posting. Iceman the 50 State Tesla dog and I were relocating from Hawaii to the mainland over the weekend. We'll return to Hawaii in a few months, but for now it's going to be nice to trade the opening of the market at a more civilized hour than 3:30am.

Despite some shenanigans in the final half hour of Friday's trading, it's been an epic week. Congratulations to all longs! Comparing the pre-market QQQ chart below to TSLA's you can see real relative strength with Tesla leading into market open. After QQQ and the NASDAQ recovered from a brief noon dip, it was off to the races for TSLA, which climbed as high as 2095 and threatened to eclipse 2100 for much of the afternoon.

With the high volume today, I'm inclined that TSLA trading just below 2100 for much of the afternoon was more a matter of careful trading by the big dog buyers than it was capping by you know who. They understood that if TSLA went above 2100, additional FOMO would set in and TSLA would likely climb higher. Thus they likely adjusting their buying rate to stay under 2100, which is smart. There's always next week.

Volume was high at 21.4M shares, which strongly suggests that whatever big dogs were loading up on shares earlier in the week were loading on Friday as well.

At about 3:31pm, QQQ (and NASDAQ) too a brief 15 minute dip. This was, of course, the opportunity that the option sellers needed and a dip on steroids ensued as they attempted a less painful closing number. Although the big prize for Friday was 2000 with over 12K call options sold, 2050 had over 6K calls sold and so the 3:31pm dip enabled a close 2 cents below that number. Normal market mechanisms? I think not.

My guess is that the big dogs who have been buying were ok with the 3:30pm push lower. It makes buying more shares next week just that much more affordable.

News includes:
* Tesla Model 3 aces Consumer Reports most satisfying vehicle survey for all age groups
* Tesla publishes rules for viewing Annual Shareholders Meeting Sept 22 and applying for drawing to attend in person

Looking at the tech chart, TSLA continues to close above the upper bollinger band, with the band running uphill, quickly behind.

For the week, TSLA closed at 2049.98, up 399.27 from last Friday's 1650.71. Over the past two weeks, TSLA is up 597.27. Epic! Hoping you all had a great weekend.

Conditions:
* Dow up 191 (0.69%)
* NASDAQ up 165 (1.48%)
* TSLA 2049.98, up 48.15 (2.41%)
* TSLA volume 21.5M shares
* Oil 42.43
* Percent of selling tagged to TSLA shorts: 43%

 

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TSLA chart above

QQQ chart above

Welcome to the roller coaster, my friends. Today, TSLA reached a new ATH in pre-market trading and new market hours trading upon opening. Alas, QQQ, which had been up more than 1% in pre-market faded then dipped into the red later that morning, recovered, then then touched red again before a final hour recovery.

The first piece of information you need for considering TSLA's response to this roller coaster NASDAQ and QQQ is that 20 million TSLA shares traded today. This tells me that the big dog(s) are still acquiring. Alas, they're perfectly willing to back off on their buying to assist the hedge funds with their push lower if it makes shares cheaper. Thus we saw a swing with QQQ of nearly 9% from TSLA opening price to the day's low at 9:54am. The easiest targets are traders holding TSLA for S&P500 inclusion because they lack conviction. The nearly 9% run from open to low in less than half an hour did the job. In a 2 minute stretch we saw over 200K shares trade hands.

In news, Wedbush analyst Dan Ives increased his bull case target on TSLA to $3500/share, which helped get retail investors excited. In my opinion, no way was today's dip at 9:54am purely a reasonable market reaction. We really have three catalysts here. First, the traders who are sitting on huge gains by buying TSLA stock and options often have a hair trigger to protect those gains, and some were persuaded to sell by the deep dip at 9:54am. Secondly, not only the options sellers but also the big dog buyer(s) are gaming the trading to favor lower prices. Thirdly, the roller coaster NASDAQ today, even if the ups and downs were only about 1%, facilitated the manipulations. Look at the dips and you'll see a high multiple of TSLA vs. QQQ or NASDAQ, but on the climb side TSLA doesn't enjoy this same multiple and sometimes we even see capping as the macros climb higher. That perceived capping could include some mischief from the options sellers, but I think in this case it's mostly intelligent buying from the big dogs. They find a decent rate of trading at a certain price point and will back off on buying to hold it rather than bid up the price. This level trading then encourages more traders to throw in the towel and sell, which works well for the big dogs acquiring shares. Throw in the possibility of naked shorts covering before the split but using mischief to cover as low as possible, and you have nothing short of a carnival if all those players actually exist and are actively working the stock.

Since the skillful big dog buyers share a common goal with certain option selling hedge funds, which is to prevent TSLA from climbing too high, TSLA has some susceptibility to macro dips and manipulations at this time. OTOH, with S&P500 inclusion, battery day, and effective date for the stock split not far down the road, TSLA can quickly generate FOMO and has the ability to climb quickly, too. This week is very unpredictable, IMO.

For little over a month, TSLA dipped from about 60% selling by shorts to about 40%. On Monday TSLA shorts were tagged with 58% of selling, which could signal either another long period in which algobots are working the stock or it could mean some particularly heavy efforts to use short selling to influence the selling today. If the percent of selling stays elevated for a prolonged period, I vote that heavy algobot action is the explanation for today's rise in the percentage of selling by shorts number.

Looking at the tech chart, TSLA dipped back below the upper bollinger band today after being significantly above the upper bb for 2 days previously, so the 2 day rule, though not solid, is still showing some predictive powers.

Conditions:
* Dow up 378 (1.35%)
* NASDAQ up 68 (0.60%)
* TSLA 2014.20, down 35.78 (1.75%)
* TSLA volume 20.1M shares
* Oil 42.57
* Percent of selling tagged to TSLA shorts: 58%

 

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TSLA chart above

QQQ chart above
In many ways Tuesday's TSLA trading was the opposite of Monday's. Instead of TSLA running high during premarket and then dipping hard in the first hour of trading, TSLA rose from pre-market lows and popped momentarily into the green during the first hour. QQQ shows a steady climb in the afternoon into close, which is a really good setup for TSLA to do well. Why did it underperform the NASDAQ then? Part of the answer was volume, only half of Monday's volume. Did the big dog buyers finish loading up on Monday, and does this development explain the lower volume? I doubt it. Instead, I think the big dogs wanted to buy below 2000 today and were willing to acquire fewer shares than on Monday to keep from pushing the stock price higher. The flip side of that story is that only half the sellers materialized Tuesday compared to Monday. I think the big dip from pre-market to the megadip at 9:54am scared some traders into selling. Today, TSLA was less scary and some of the most trigger-happy traders were already eliminated on Monday. Thus, fewer sellers below 2000 and buyers not willing to pay more than 2000 yielded lower volume on Tuesday.
If you look at the chart below, you can see elevated trading volume over the past 10 trading days in which 6 of the sessions were high volume and these were interspersed with 4 low volume days. The big buyers didn't go away, they just reduced the volume here and there, and that's what I think happened on Tuesday.
At about 12:15pm, QQQ took a dip of about 0.25%, which isn't much, but it was the perfect opportunity at TSLA for a dip on steroids to see if any more longs could be shaken out. Overall, we saw lots of icicles today, suggesting that someone was working the stock to try pushing it lower. Between big dog buyers easing the buying and the usual suspects generating these selling flurries, TSLA did well to end in the green today.
When TSLA closed well above 2000 today, the failure to manipulate the stock lower became evident. Extended hours trading shows TSLA up an additional 1.22% after hours, which is more than double the gains during market hours. Tesla daily in this article suggests that when the Jefferies price target doubling to $2500 news came out today, this news propelled the stock price higher. The story says that Philippe Houchois has nearly tripled TSLA's price target in the past two months, first from $650 to $1200 and then today to $2500. As these price target increases continue to pour in, the market is showing its growing more comfortable with the current TSLA stock price.
As a general rule, gains after hours at TSLA usually carry over into a positive start to trading the next morining.

TSLA shorts were tagged once again with 58% of the selling on Tuesday. Notice that unlike most other stocks where the percent of selling by shorts number bounces around, at TSLA the numbers tend to plateau for up to a month at a time, suggesting that someone is working the stock heavily with algobots and then turning off the high-speed trading algos for a month or more before resuming.

Looking at the tech chart, the upper bollinger band has climbed to 2121 now and so there's headroom for more climbing now.
Conditions:
* Dow down 60 (0.21%)
* NASDAQ up 87 (0.76%)
* TSLA 2023.34, up 9.14 (0.45%)
* TSLA volume 10.5M shares
* Oil 43.35
* Percent of selling tagged to TSLA shorts: 58%

 

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Chart of TSLA above

Chart of QQQ above

Congratulations, longs, TSLA's close today eclipses previous close and intraday ATHs. What we saw on Tuesday was a price target announcement by Jefferies that sent TSLA climbing in after-hours trading. As expected, that sentiment carried over to Wednesday morning's open. At first, you can see the typical effort to suppress a climb, but when buying reached 68K shares in a single minute at 9:45am it was off to the races as investors started jumping in with a bad case of FOMO. Combine this FOMO over an attractive price target from a respected analyst and then add a really strong climb throughout the day by the NASDAQ, and you have the ingredients for the strong climb that TSLA encountered today.

Notice that volume was only 14M shares. This is relatively light volume for a nearly 130 point climb, and light volume makes it harder for the market makers to keep up with their delta-hedging, which in turn promotes a move stable climb into the close.

Also notice the relatively flat trading at about 2115ish for about a 3 hour stretch as the big dog buyer(s) tapered buying so as to not bid the price higher. IMO, that tapering of buying is the primary reason for the lowish volume. Alas, QQQ kept rising and the pressure built on TSLA so that at 1:06pm we saw 37K volume in a single minute and the stock broke significantly higher. This is a common pattern as TSLA's climb is being restrained in level trading which pressure builds with the NASDAQ continuing a strong climb. At some point, a break higher becomes likely.

Please pardon the brevity of the analysis but I'm still time constrained.

Coronavirus News
The FDA has just granted Abbott approval for its 15 minute COVID19 test. Abbott will be selling the tests for $5 apiece to its customers who own the testing machine, and by the start of October Abbott hopes to be providing 50 million tests/mo. This is a big step forward because entities such as airports, airlines, and employers can greatly expand their testing. We still need approval for the 15 minute test strip type of COVID 19 tests if we want to tame the monster before a vaccine comes available.

Despite the strong performance of TSLA today, the stock price still remains below the upper bollinger band, which is climbing rapidly. TSLA's alternating between above the upper bb and below has been working well in this buying environment. The upper bb should exceed 2200 on Thursday if TSLA does any climbing.

Conditions:
* Dow up 199 (0.30%)
* NASDAQ up 130 (1.73%)
* TSLA 2153.17, up 129.83 (6.42%)
* TSLA volume 14.2M shares
* Oil 43.35
* Percent of selling tagged to TSLA shorts: 54%

 

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TSLA chart above

QQQ chart above

Welcome to another ATH intraday record and close record. It was also a day for roller coaster riding. Overall, I think you have some big players determined to acquire a certain number of TSLA shares prior to Monday's split. The morning's trading volume was actually somewhat low for morning trading, and this low volume wasn't allowing the buyers to acquire shares quickly enough for reaching their goals before the end of this week, and so you can see as the volume picked up the stock price rose. The reverse is also true: as the stock began to rise, Fear Of Missing Out set in and generated additional volume.

In any event, TSLA topped 2293 shortly after noon and then began a quick descent. Meanwhile, QQQ had already topped out and was losing value, but it's important to note that although QQQ lost about 1.7% during the midday high to low slide, TSLA lost 7% from the midday high to low. Thus what we saw with TSLA was a classic dip on steroids as certain parties enhanced the drop because 1) some hedge funds wanted TSLA to close lower on Friday, and 2) the big dogs currently acquiring shares would be pleased to acquire at a lower price and also see longs receive some encouragement to sell at higher volume. The spectacular overreaction of TSLA to the NASDAQ (QQQ shown here) dip really stirred up volume to compliment the high volume during the late morning climb and we saw a day with high volume even though volume started off rather low in morning trading.

TSLA recovered a good deal of value by close, but the dramatic drop of TSLA served its purpose and the big dogs likely took good advantage of the increased volume and lower prices this afternoon.

Looking at the tech chart, you can see the nice bracketing of the upper bollinger band by the closing TSLA stock price. Also, if you look back on several months of this rally, you see only three days in August when TSLA dipped significantly below the mid bollinger band. Also notice that 10 of the past 12 trading days have been positive.

Conditions:
* Dow up 160 (0.57%)
* NASDAQ down 40 (0.34%)
* TSLA 2238.75, up 85.58 (3.97%)
* TSLA volume 23.7M shares
* Oil 43.09
* Percent of selling tagged to TSLA shorts: 58%