Papafox's Daily TSLA Trading Charts

[Papafox]

TSLA chart above

QQQ chart above

Friday's TSLA trading was no great surprise. The NASDAQ and QQQ traded in a benign fashion as you can see by the QQQ dips only extending about 1/3 of 1%, with some recovery just prior to close. Nonetheless, it was a Friday options expiration day and this micro-dip gave the market makers license to push TSLA down in the afternoon and try to optimize the close.

As you may remember, going into Friday's open we saw lots of call options at 650, 660, and 670 and my suspicion was that the market makers would do a pushdown to whichever of those three strike prices looked achievable as the day drew to a close. In Friday's case, 670 became the target and the MMs managed to push TSLA down more than a dollar below 670 as we approached 15 minutes of trading remaining. Of course traders wanted some of those discounted shares prior to close for Monday open and other bets, and so buying picked up and TSLA closed at 671.87. In fact, the closing cross at 4:00pm saw more than 1.8 million shares trade hands in a single minute. I assume some of that buying was market makers buying to cover after shorting TSLA to achieve their desired price. Unfortunately for them, the volume became unmanageable near close and the price rose.

Recent reports suggest that Tesla is preparing a number of Shanghai built Tesla for export. Along with reports of FUD in May possibly affecting June demand and the 1-3 week delivery timetables in China, it's entirely possible that Q2 Tesla deliveries could be meh rather than bravo. Naturally the analysts have been quick to raise their Tesla delivery targets as Q2 progressed but failed to lower them as issues may have popped up in China. TMC's @The Accountant sums up the China production and delivery prevailing theories well in this post. One should be prepared for a less than fantastic Q2 delivery report, but the other side of the coin is that everyone including Tesla bulls underestimated Q1 deliveries substantially, so one needs to realize that we really don't know how the Q2 delivery numbers are going to work out with precision. From posts by @The Accountant , we have pretty good reason to believe the Q2 Earnings Report will substantially break new ground for Tesla in a positive way, however. Keeping your investment timetable sufficiently long, especially to catch the positive sentiment at year end as Berlin and Austin open and then as production numbers jump in 2022 remains a more reliable bet.

FUD: Linette Lopez and the usual suspects are busy trying to spin the China Over the Air (OTA) update of 300K vehicles as a mass recall. It's a near-costless OTA software update to make Teslas compliant with a safety concern of the Chinese Authorities. No bid deal, but the FUD-slingers are trying to build a mountain out of a molehill, nonetheless.

This weekend I've been lurking in the Model S delivery thread and have seen the beginning of scheduled Model S LR deliveries. Some are being delivered this week. Meanwhile, Model S Plaid deliveries are really becoming more numerous, even as far from California as Florida. The bottleneck is clearing. Some configurations, such as white interiors or 19" wheels, are showing supply issues so far. Model S vehicles with Plaid and/or 21" wheels are getting priority for delivery, which would of course be Tesla maximizing margins on Q2 deliveries.

A rise in 10 year treasury yields to above 1.5% would have had a negative effect upon QQQ and the NASDAQ on Friday

Meanwhile, Bitcoin has bounced back as of writing time this weekend, leaving the dip on Tuesday the 22nd to look suspiciously like an effort to sink bitcoin momentarily below Tesla's purchase price to punish Elon. We'll likely never know the real story.

The craziness with 450 puts continues and is now joined with ridiculous quantities of 500 puts as well. These bets stand little chance of ever paying a dime, but no doubt they're serving a purpose, otherwise we wouldn't see them week after week. Their massive height makes reading the call numbers much more difficult.

Looking at the tech chart, Friday's dip barely touched the upper bollinger band but still remains above. Normally, we see the stock price fall within the bands after about 2 days. Don't be surprised to see that on Monday as the upper bb continues to rise.

For the week, TSLA closed at 671.87, up 48.56 from the previous Friday's 623.31. Hoping you've had a great weekend.

Conditions:
* Dow up 237 (0.69%)
* NASDAQ down 9 (0.06%)
* SPY up 2 (0.36%)
* TSLA 671.87, down 7.95 (1.17%)
* TSLA volume 31.6M shares
* Oil 74.05
* Percent of TSLA selling tagged to shorts: 42%
* IV 57.6, 19%

 

[Papafox]

TSLA chart above

QQQ chart above

Those traders who bought in during the final half hour of Friday did well on Monday as the NASDAQ in general and high flying tech stocks in particular did well. The NASDAQ was up nearly 1%, TSLA up 2.5%, and ARKK, which I use as a gauge for tech high flyer stocks rose more than 3.75%. The flow of funds back into the high flyers did indeed continue on Monday. In contrast, the more mainstream tech companies, Amazon and Apple, were both up 1.25%. Keep in mind that Amazon and Apple both began their climbs out of climbing bond yield Purgatory well ahead of TSLA and your typical ARKK high flyers.

Looking at the TSLA chart, I see TSLA peaking before 11am even though QQQ was still climbing beyond noon. TSLA's price walkdown was substantial, but after 2pm QQQ began a nice climb into close and TSLA followed. Notice what looks like capping at 690 for the final hour of market trading. Could it be someone doesn't want this stock going above 700 this week?

10 year treasury bond yields climbed quickly Monday morning but dipped going into the close. Perhaps that dip helped QQQ with its climb into close.

We're now gaining a better picture of options distributions. There's a substantial Put wall at 600 and a substantial Call wall at 700, suggesting the market makers are going to set their sights on trying to hold TSLA below 700 this week.

How are Tesla sales doing in the U.S.? Honolulu's store at Ala Moana Shopping Center has been completely sold out for at least the final 10 days of the quarter. Showroom cars all have new owners. Let's hope mainland stores are going gangbusters, too.

Looking at the tech chart, sector strength allowed TSLA to remain above the upper bollinger band for the fourth trading day in a row.

Conditions:
* Dow down 151 (0.44%)
* NASDAQ up 140 (0.98%)
* SPY up 1 (0.20%)
* TSLA 688.72, up 16.85 (2.51%)
* TSLA volume 21.5M shares
* Oil 72.71
* Percent of TSLA selling tagged to shorts: 43%
* IV 56.3, 16%

 

[Papafox]

TSLA chart above

NASDAQ chart above

The NASDAQ closed about 0.2% up on Tuesday, but TSLA was far more volatile, dipping nearly 1% in that 10am icicle (about a 5X dip compared to the NASDAQ dip of same time period. I think overall you had the usual suspects milking TSLA for day-trade profits. ARKK was up about 0.5% on Tuesday, as were most tech stocks. One possible explanation for TSLA's weakness is a bit of profit-taking prior to the Q2 Production and Delivery Report. After all, a trader who has no real commitment to Tesla could have bought not long ago for about 580 and enjoyed about a 100 point climb. Such traders don't have a talented accountant working the spreadsheets and giving us an idea of Q2's likely earnings.

News was both positive and negative:
Positive:
* Reuters reports German court rejects injunction against Tesla factory permits in Germany
* Consumer Reports says Tesla Model 3 Regains CR Top Pick Status and IIHS Safety Award (Note: of course we don't see the headlines like we saw when CR took the Top Pick Status away from Model 3 when radar was dropped.
Negative:
* UBS lowered its target price for TSLA. This Yahoo story, entitled Tesla is being attacked by rivals and now its stock price is at risk, focuses on UBS seeing competition coming (the old standby FUD).

As for projected deliveries in Q2, Rob Maurer in this video podcast projects about 203K deliveries in Q2, analysts are around 200K deliveries now, and Troy is projecting in the mid to high 190Ks.

Wednesday is the last day of the quarter. We may see the P&D report released before market open on Friday, July 2.

10 year treasury bonds once again started running higher but dropped back to less than 1.5% by day's end

Here's your latest look at high numbers of 700, 750, and 800 strike Call options. Those enormous put walls at 450 and 500 cause all other option strike prices to look small in comparison.

Looking at the tech chart, the stock price has finally returned to within the bollinger bands, after four days above.

Conditions:
* Dow up 9 (0.03%)
* NASDAQ up 28 (0.19%)
* SPY up 0 (0.05%)
* TSLA 680.76, down 7.96 (1.16%)
* TSLA volume 17.2M shares
* Oil 72.98
* Percent of TSLA selling tagged to shorts: 42%
* IV 55.6, 14%

 

[Papafox]

TSLA chart above

QQQ chart above

Please disregard the QQQ chart above. QQQ shifted only between 355 and 354 throughout the day, so its movements were not of consequence. Snore.

In contrast, TSLA exceeded 692 and closed slightly in the red, slightly below 680. That's a greater than $12 range or about a 1.8% fluctuation, which is quite a bit larger than we we saw with QQQ or NASDAQ today. Tesla's likely excellent earnings results in Q2 are taking a back seat for now behind concerns about how China demand in June will affect the Production and Deliveries report.

Let's face it: Tesla endured a really nasty and active FUD attack in May. A large percentage of Chinese consumers are savvy enough to have realized that Tesla was being unfairly targeted. Why then would there be a noticeable dip in Chinese demand in June (if a dip actually occurred)? One thought of mine is that in the past I have seen Chinese consumers sitting back and waiting for the initial price on Tesla Model 3 to be lowered to a more mainstream price. They learned from watching the Model 3 pricing in the U.S. before placing their orders. My thought is that many Chinese potential buyers thought that a dip in demand would bring a price cut from Tesla and they were waiting for that price cut. It never came. Instead, Tesla increased exports from China and may have produced a fair number of vehicles in Q2 which are being readied for export in Q3. For the year, Tesla will do fine, but we may see some Q2 production shifted to Q3 for delivery in other countries. If so, this holding the price line despite a FUD attack will send a signal to consumers that Tesla is not going to reward bad behavior.

Wednesday was the last day of the quarter and many forces are at work on stocks on such a day. Virtually all the other stocks I follow closed down on Wednesday, but the difference is that most lacked the big morning climb of TSLA. ARKK also had a nice morning climb and closed down slightly, so maybe there are sector (high flying tech stocks) factors at work. Also notice that it's common for TSLA to be up in the morning when volume is high but settle in the afternoon when volume is low. Push-downs on low volume suggest manipulations to me, especially when the low volumes are toward the end of the day.

News:
* Deutsche Bank put out a note today with a $900 price target for TSLA and positive sentiment

10 year treasury bond yields dipped on Wednesday to below 1.5% again.

Look at the steadily growing number of call options between 700 and 750. If the P&D Report is a beat, the stock price would most likely rise, and each $10 increment would be more painful for market makers than the previous one. Consequently, don't be surprised by capping to minimize damage.

Looking at the tech chart, you have the mid bollinger band, the 50 day moving average, and the 200 day moving average all converging, so I would suspect we'd see support at that level if it was ever needed. Looking at the horizontal trading over the past 5 days, I suspect someone really doesn't want TSLA running above 700 this week.

Conditions:
* Dow up 210 (0.61%)
* NASDAQ down 24 (0.17%)
* SPY up 0 (0.08%)
* TSLA 679.70, down 1.06 (0.16%)
* TSLA volume 17.3M shares
* Oil 73.47
* Percent of TSLA selling tagged to shorts: 39%
* IV 58.2, 21%

 

[Papafox]

TSLA chart above

QQQ chart above

Thursday's trading was volatile, as you might expect on the likely last day before the Q2 Production and Delivery Report comes out. You see reactive buying or selling, which is why we see such quick reversals. The stock moves in one direction, algos kick in and join the buying or selling, and some retail investors think "someone knows something" and joins the stampede.

The calls between 700 and 750 continue to rise, which will give market makers some incentive to cap (if they can) should P&D Report numbers be better than expected

Looking at the tech chart, the upper bollinger band has risen within 83 cents of $700, and so we might have lively trading if the numbers exceed expectations.


Conditions:
* Dow up 131 (0.38%)
* NASDAQ up 18 (0.13%)
* SPY up 2 (0.55%)
* TSLA 677.92, down 1.78 (0.26%)
* TSLA volume 18.2M shares
* Oil 75.03
* Percent of TSLA selling tagged to shorts: 44%
* IV 57.8, 20%

 

[Papafox]

TSLA chart above

QQQ chart above

Tesla delivered over 201K vehicles in Q2, meeting delivery expectations and disappointing the vultures who were circling overhead. Nonetheless, market makers weren't about to let Tesla good news spoil their weekly options profits, and so we saw TSLA pushed down close to the ideal 677.50, or thereabouts. When the stock price defies the news and settles Friday very near the ideal max pain price for the option sellers, you know that the manipulators are calling the shots. Nonetheless, as the manipulations continue, TSLA has climbed every week for the past 6 weeks. Tick, tick, tick.

Looking at the TSLA and QQQ charts above, you can see a reasonable market reaction to the P&D Report news as TSLA rose to nearly 700 shortly after open. The pirates went to work, pushing TSLA down in order to claim maximum booty on their sold options. No negative news of consequence came out on Friday and look at the constantly rising QQQ chart while TSLA was giving up all its gains. So obvious.

Because TSLA was clearly manipulated down on Friday after good news and with groundbreaking good news likely coming in the late July Earnings Report, and because market makers may have additional delta hedge buying to do on Monday, I reduced my cash position and bought three more leaps Friday afternoon.

@The Accountant has had time to plug the Q2 numbers into his spreadsheet and come up with tentative profit numbers for the earnings report. Check them out here in the Near Future Quarterly Financial Projections Thread.

Winner of this week's most highly suspect activity goes to a certain top executive of a company that is one of the largest traders of TSLA options. The fact that his Plaid Model S started smoking from the backseat without any warnings on the panel and then burned to the ground (and no other Plaid Model S vehicles had any similar problems) and then his attorney immediately spewed FUD on Twitter and accepted an invitation to appear on CNBC (but later declined), on the eve of the Friday options closing after a positive Production and Delivery Report, earns this individual a Class 5 suspect award with sprinkles, gold stars and one Hostess Twinkie, for good measure.

Friday's dip in short term bond yields kept the yields below 1.5%.

With those towering mountains of 400, 450, and 500 puts, it's hard to read the calls. Clearly, someone is deriving utility from those Puts because they keep going in week after week with no real chance of paying off. For the Call options we see 12K at 700-strike, 6K at 730-strike, and 10K at 750-strike. All those numbers will change considerably as the week progresses.

Looking at the tech chart, you can see the clear capping effort to keep TSLA below 700 (and closer to 680) this past week. Dynamic stocks like TSLA with lots of important news lately don't trade

For the week, TSLA closed at 678.90, up 7.03 from the previous Friday's 671.87. Is TSLA in a breakout rally? One way of judging that situation is to look at weekly performances for the past 6 weeks. Each week was an "up" week, with a gain of $150.40 over the period. Not bad. Hoping you're all enjoying a wonderful weekend.

Conditions:
* Dow up 153 (0.44%)
* NASDAQ up 117 (0.81%)
* SPY up 3 (0.76%)
* TSLA 678.90, up 0.98 (0.14%)
* TSLA volume 26.7M shares
* Oil 75.16
* Percent of TSLA selling tagged to shorts: 39%
* IV 56.3, 17%

 

[Papafox]

TSLA chart above

QQQ chart above

Please forgive my brief posts this week, I am caring for a very sick dog who requires almost non-stop attention.

Looks like the option sellers took advantage of some minor ambiguity in the Q2 Production and Deliveries Report today. The stock was trading up in pre-market, but the pirates chose to send TSLA down to 655 for much of the day before it recovered a little right before close. If Q2 P&D Report had been a blowout beat, such as 210, I think the market was ready to accelerate the 6 week climb. Instead, the market makers and other big dogs called in favors from their friends in the media, created a hefty bombardment of FUD, and then sold hard on open to achieve their goals. Besides Friday's burning Plaid Model S that just happened to be driven by a top trader of TSLA options, we had the New York Times dragging up a fatal autopilot accident from two years ago (nevermind that the software has been extensively improved since then) and Bloomberg contending Tesla's trouble in China will be extensive.

Maximum pain (for option buyers) currently stands at 660. TSLA closed on Tuesday at 659.58 (all just a coincidence, right?). That's a nearly $20 dip and these guys get within 42 cents of their target. Impressive.

I buy leaps for trading because we do not play in an honest casino. Within 2 years, TSLA will find its way to a price that comes much closer to reflecting its value.

While media outlets were launching their FUD, a number of big Wall Street analysts put forth buy recommendations and noteworthy price targets. Goldman Sachs targets 860 and Adam Jonas of Morgan Stanley targets 900.

No wonder QQQ had a good day

Short-sellers had to push the shorts' percentage of TSLA selling up to 58% in order to engineer their manipulations today

The towers of 400-500 puts rise again, even though they will never find TSLA price low enough to ever enter "in the money".

Conditions:
* Dow down 209 (0.60%)
* NASDAQ up 24 (0.17%)
* SPY down 1 (0.18%)
* TSLA 659.58, down 19.32 (2.85%)
* TSLA volume 22.6M shares
* Oil 73.72
* Percent of TSLA selling tagged to shorts: 58%
* IV 56.6, 17%

 

[Alphacrux]

Re: 400-500 strike puts. It might be possible that some traders who are short puts at a high strike are buying weeklies at a lower strike price to reduce the margin requirement of a fully naked short put position.

 

[Papafox]

TSLA chart above

QQQ chart above

On a generally positive day for macros, TSLA dipped 2.26% on light volume. The sector high-flyer tech stocks (TSLA included) was down today, as evidenced by ARKK's decline of 2.34%. Additionally, in this TMC post by @Lycanthrope , you can see that EV and automotive stocks were down big-time on Wednesday, which could primarily explain TSLA's weakness. Naturally, some hedge funds will enhance the decline with short-selling (and then covering at the bottom), so TSLA will typically decline more than you would expect for the circumstances.

Two positive catalysts are materializing, however.
* Tesla will be selling the SR+ version of Model Y, starting in August. This version apparently has range of 288 miles, which makes it a solid choice when compared to the competition. I suspect Tesla can easily sell all the Model Ys it can make in Q3, and at some point Mr. Marker will realize this as well.
* Elon Tweeted Wednesday evening that the Beta Ver. 9 of Full Self Driving begins shipping on Saturday. Over the weekend we should see some amazing videos pop up, which can lead to buying as investors realize how big a leap this version of FSD has achieved.

On Wednesday we saw a big dip of short term bond yields. Mr. Market should be pleased.

Thanks @Alphacrux for pointing out that the 400-500 strike puts may be bought by option sellers who have also sold higher strike puts, in order to avoid margin issues. Makes sense.

The 50 day and 200 day moving averages are about to converge. Lets hope that the stock price remains above that point so that the cross is regarded as a positive.

Conditions:
* Dow up 104 (0.30%)
* NASDAQ up 1 (0.01%)
* SPY up 2 (0.35%)
* TSLA 644.65, down 14.93 (2.26%)
* TSLA volume 18.7M shares
* Oil 72.27
* Percent of TSLA selling tagged to shorts: 44%
* IV 58.4, 23%

 

[Papafox]

TSLA chart above (note: our usual chart with pre-market and after hours data was gorked by a spike)

QQQ chart above

While sector redistributions and macro movements have given TSLA quite a bumpy ride this week, it's important to realize that here we are one day before options close Friday and TSLA is trading just 31 cents above max pain. What a coincidence, yet again! The way it works is that macro and sector forces plus real news and FUD move TSLA up and down. Market makers and other option sellers have the ability to accelerate dips or decelerate climbs. By managing the trends of the day, market makers have been surprisingly capable of guiding the stock price to a close within a couple dollars of the maximum pain price, week after week.

As a case in point, check out Thursday's TSLA trading. Good news propelled TSLA higher on Thursday. Most of the climbing was through by 1:30pm and you can see what looks to my eye as capping of TSLA any time it wanted to climb higher than about 652. The stock price didn't rise to 655 until the last few minutes prior to close and then it dipped obediently to the max pain number in the final minute of market trading.

Gary Black computed June and Q1 vs. Q2 China sales and exports in the chart above. It turns out the dire warnings from the media that Tesla sales were tanking in China simply weren't true. Note, I don't consider an increase of exports as equating to local sales tanking.

Here's a summary of good news coming out this week:
* China sales and export numbers for June revealed that Tesla Shanghai produced and sold more vehicles in Q2 than in Q1 and that June sales were not the dramatic hit that the media had alluded to
* Model Y Rear Wheel Drive Standard Range is going on sale this quarter in China for a noticeably more attractive price than the current Model Y
* Made in China Model Ys will be exported to Europe
* Tesla has raised the price of refreshed Model S LR and Model X LR by $5000
* Beta Ver 9 of Full Self Driving will begin being distributed after midnight on Friday

The last catalyst is potentially bigger than you might imagine over time because Elon Tweeted that "the button" to download the new version of the software could be coming after about a month following the Version 9 release. That will give time for extraordinary videos of FSD to be released, for Tesla non-owners of the software to be impressed, and for Tesla to offer a monthly subscription model for the software. Companies such as Microsoft and Adobe realized very large gains when their software changed from a purchase model to a subscription model, and Wall Street is aware of the potential income that came arrive if subscriptions to FSD become plentiful. Tick, tick, tick.

Anyway, the good news, particularly the China sales news buoyed TSLA today on a day with negative macros.

Will TSLA close very near the max pain price of 652.50 on Friday? History would suggest so, but the other possibility is that some whale of a buyer starts picking up shares on Friday, based upon this plethora of good news. At some point, heavy buying overwhelms the ability to manipulate. With TSLA trading only about 20 million shares a day so far this week, a repeat of the volume would likely favor the manipulators. It's going to be interesting to watch.

The 6 month 10 yr. treasury bond yield chart appears above. You can see how the market would have been spooked in late March as yields rose so quickly. OTOH, the trend has been downward, especially in July. The excuse for the punishment of high flying tech stocks has been neutralized, at least for now.

Official max pain number is 652.50 for Friday, but if you look at the chart you'll see 650 and below is dominated by puts and 660 and above dominated by calls. You thus have a range of 650 to 660 which would be the sweet spot for Friday's close, from the standpoint of the option sellers.

TSLA opened at the intersection of the 50 day and 200 day moving averages, dipped a bit below, but then ran much higher and closed above the mid-bollinger band. That has to be bullish.

Conditions:
* Dow down 260 (0.75%)
* NASDAQ down 105 (0.72%)
* SPY down 4 (0.81%)
* TSLA 652.81, up 8.16 (1.27%)
* TSLA volume 22.4M shares
* Oil 72.94
* Percent of TSLA selling tagged to shorts: 45%
* IV 57.9, 21%

 

[Papafox]

TSLA chart above

QQQ chart above

On Friday, TSLA performed about 0.35% worse than the NASDAQ on an up day for the index. This contrasts with Thursday, when the NASDAQ was down yet TSLA closed up and managed to perform 2% better than it. The difference? Friday was... an options close Friday! As Friday arrived, calls crept slightly higher than puts for 650-strike options, 655 favored calls and the difference between puts and calls was very significant at 660 and above. I close at 650 would have been best for the pirates, but they definitely wanted TSLA below 660. They got about 657.

Take a look at the TSLA chart above. After TSLA and NASDAQ peaked about 12:30pm-1:00pm, the NASDAQ took a little dip, but look how much the pirates managed to shave off TSLA during that dip? Similarly, just after 3pm nothing earthshaking was happening with the NASDAQ but look at the rapid dip that hit TSLA. I suspect this would have been the pushdown where the pirates (I mean option sellers) tried to take TSLA below 655 and closer to 650, but we have traders who are looking for bargains on Friday afternoons and they bought the dip and then pushed the price up into close.

All the same, 655 was very close to the max pain point (because puts and calls were nearly even at 650) and a close within $2 of max pain is a win once again for the market makers and option-selling hedge funds.

How does the week ahead look?
Negative
* Elon will be in court on Monday, defending Tesla's acquisition of Solar City
Positive
* FSD v9- Beta testers are driving the new V9 version of Full Self Driving and overall it looks impressive. I don't think we'll see much of a market response until Tesla makes FSD available on a monthly subscription plan, but the Wow! factor is there, from what I can see, and this will drive people to subscribe.
* @The Accountant has been busy this weekend. He says that in the U.S., Model Y is sold out already for Q3 and Model 3 LR is nearly sold out (we're not even halfway through the quarter's first month!) He has also posted updates on Q3 profitability here.
* Reports are that orders for Model Y RWD SR are very strong in China and we could see Model Y sell out for the quarter fairly quickly.
* Warren Redlich interviewed James Stephenson in this video about TSLA profits in upcoming quarters, and the results are eye-opening
* Virgin Galactic's successful space flight with Sir Richard Branson aboard and Elon watching from the ground gave an air of optimism to the weekend. You owe it to yourself to check out the quick video at this Twitter post of gals playing in the zero gravity environment while Richard talks to kids about his dream.

See max pain discussion above

Congratulations, longs, we survived the dreaded "death cross" as the 50 day moving average descended below the 200 day MA. Since Tesla was above the cross and trading positively on Friday, no technical traders have been spotted running for the hills.

For the week, TSLA closed at 656.95, down 14.92 from the previous Friday's 671.87. Hoping you enjoyed your weekend. Lots of work expected in the coming week with my seriously ill dog, so please realize I am time constrained in putting together these posts at the moment.

Conditions:
* Dow up 448 (1.30%)
* NASDAQ up 142 (0.98%)
* SPY up 5 (1.07%)
* TSLA 656.95, up 4.14 (0.63%)
* TSLA volume 18.1M shares
* Oil 74.56
* Percent of TSLA selling tagged to shorts: 40%
* IV 54.6, 12%

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA climbed 4.38% on Monday, buoyed by good news. In particular, one report claimed 10,000 Model Y orders in China on the first day of the new lower cost Y RWD SR. Looks like demand worries have been buried for now, and the market was happy.

Monday was also the first day of Elon's trial to defend the Solar City purchase by Tesla. To all appearances, it's going well for Elon as he gives reasonable answers to the grilling. At one point, Baron, the litigants' attorney, queried Elon about rage decisions and why Elon didn't like the attorney. Elon's answer is classic. Check it out on this Gary Black Tweet (After /6).

News:
* Germany has extended an important EV subsidy

So, where do we go from here? Looking at the tech chart, TSLA has been pinned in the mid 680s except for last week's dip to satisfy the option sellers. The stock could stabilize at that previous level again. Another possibility is that TSLA might have enough momentum to shoot through 680 with its sights on 700. Expect the 2Q ER in late July, and so we're likely within 2 weeks of that ER that should really raise eyebrows with its profits. At some point, likely before the ER date, we're going to see upward movement of the stock price to position for the report.

The strike price 650 is currently the lowest where calls dominate puts. Expect that transition point between calls and puts to change as the wek progresses. Notice we once again have the heavy put volume in the 400 to 500 area, but interestingly we see over 50K puts at 600, as well.

I detect a bit of flattening out of the 50 day moving average line (blue). When that line recrosses the red (200 day moving average) we will have a golden cross, which should get the technical traders a bit excited.

Conditions:
* Dow up 126 (0.36%)
* NASDAQ up 31 (0.21%)
* SPY up 2 (0.36%)
* TSLA 685.70, up 28.75 (4.38%)
* TSLA volume 25.6M shares
* Oil 74.18
* Percent of TSLA selling tagged to shorts: 40%
* IV 53.0, 10%

 

[Papafox]

TSLA chart above

QQQ chart above

Pre-market and after market open, TSLA investors wanted to bid the stock up, but the market makers and hedge funds had other ideas. Until about 1pm the NASDAQ was strong, but an afternoon selloff was a perfect opportunity to push TSLA down even further. It's just easy money pushing a stock down once it shows some weakness for the day and the macros start to fall. Look at 2:03pm when 81K shares were sold in a single minute and you have that Oklahoma funnel cloud descending from above.

OTOH, this post by TMC's @jw934 shows strong similarities in trading between TSLA and NIO on Tuesday. What we witnessed on Tuesday may in fact be more than 90% market forces.

The best remedy for manipulations is a record-breaking 2Q Earnings Report, and Tesla just announced the ER is happening Monday, July 26. That's less than 2 weeks away.

Tesla Announces Date for Second Quarter 2021 Financial Results and Webcast​

BUSINESS WIRE
Jul 12, 2021
PALO ALTO, Calif., July 12, 2021 – Tesla will post its financial results for the second quarter of 2021 after market close on Monday, July 26, 2021. At that time, Tesla will issue a brief advisory containing a link to the Q2 2021 update, which will be available on Tesla’s Investor Relations website. Tesla management will hold a live question and answer webcast that day at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time) to discuss the Company’s financial and business results and outlook.

What: Date of Tesla Q2 2021 Financial Results and Q&A Webcast
When: Monday, July 26, 2021
Time: 2:30 p.m. Pacific Time / 5:30 p.m. Eastern Time
Q2 2021 Update: http://ir.tesla.com
Webcast: http://ir.tesla.com (live and replay)

Approximately two hours after the Q&A session, an archived version of the webcast will be available on the Company’s website.

For additional information, please visit http://ir.tesla.com.

News:
* Goldman-Sachs raises Tesla earnings estimate- The firm has raised its Q2 non-GAAP earnings estimates from .84/share to .94/share, but it hasn't changed its price target.
* Electrek says that both LG and Samsung have produced sample 4680 cells for Tesla. Wondering what Tesla's Plan B is if development of the in-house 4680s takes too long? Here's one possible solution.
* Elon revealed Tuesday after hours that although demand for Powerwall is as much as 80,000, only about 35,000 may be built this quarter due to chip shortages.

The favored Friday closing price of TSLA for option sellers is 650 at the moment, but it could pretty easily jump to 680 if put speculators get emboldened.

On Tuesday TSLA lost much, but not all, of Monday's gains.

Conditions:
* Dow down 107 (0.31%)
* NASDAQ down 56 (0.38%)
* SPY down 1 (0.34%)
* TSLA 668.54, down 17.16 (2.50%)
* TSLA volume 20.8M shares
* Oil 75.25
* Percent of TSLA selling tagged to shorts: 43%
* IV 53.1, 11%

 

[Papafox]

TSLA chart above

QQQ chart above

For the second day in a row, EV stocks were down and TSLA got caught in the downdraft. Here's a summary of auto stocks published in this post by @Curt Renz :
-8.18% CCIV
-7.66% RIDE
-4.25% NIO
-2.94% NKLA
-2.27% TSLA
-1.24% GM
-1.18% F

So, everything is honest market forces, right? Well, @jw934 made another interesting post on Tuesday that shows extraordinary similarities between the deep pushdown of TSLA and NIO during a specific period of time. The pushdowns are similar enough to suggest a proactive activity by the algos, rather than a reactive response. Is it possible the hedge funds are simultaneously manipulating multiple stocks within a specific sector? The fingerprints suggest so. Think about it, EV stocks are similar in that their valuations are hard to nail down. They can be manipulated in similar fashions with similar results. The pirates gain the bonus of seeing the whole sector start to dip further if two (or three or four) stocks are manipulated in parallel. Granted, there can be legitimate sector weakness (such as this week) that is magnified by short-selling the dips. You then have exaggerated price dips for the whole sector, which only increases the dip of the target stocks and magnifies the profits of day-shorting such dips.

Regarding worries that Tesla is shipping fewer vehicles to Europe this quarter, I go with the idea that Shanghai is taking over much of the production that Europe needs, especially with Model Y being introduced. Demand is very high in the U.S. (take a look at used Tesla prices and the wait times to buy new Teslas) and so more vehicles from Fremont will stay in the U.S. in Q3. Drone flyovers of Fremont suggest plenty of production underway. Looks like once again, Tesla will be able to sell everything it can make.

Despite all the doom and gloom out there about inflation rekindling, the 10 year treasury yields remain below 1.5%

Looks like the mid-bollinger band worked as support on Wednesday. If Thursday is a down day, don't expect that support to hold, however. Right now the combination of sector forces (EV stock prices) and the usual acceleration of dips by profit-seeking hedge funds has put the dream Friday close of the market makers (650) within striking range.


Conditions:
* Dow up 44 (0.13%)
* NASDAQ down 33 (0.22%)
* SPY up 1 (0.15%)
* TSLA 653.38, down 15.16 (2.27%)
* TSLA volume 21.5M shares
* Oil 73.13
* Percent of TSLA selling tagged to shorts: 42%
* IV 52.5, 10%

 

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TSLA chart above

QQQ chart above

Nasdaq chart above

On Thursday TSLA began the morning trading up even though the macros were trading down. Unfortunately, when the NASDAQ continued down greater than 1%, TSLA got pulled down as well. At its peak of the dip, TSLA was down a little over 2%, which is a typical multiplier for TSLA when TSLA and the macros begin at the same level, but when TSLA is up quite a bit when the macros are down in the morning, the pushdown is excessive. I suspect the hedge funds were shorting the dip and profiting. Fortunately, you can see from the charts above that once QQQ reached bottom, TSLA recovered at a much higher pace, showing some of the strength that had been apparent in the morning trading. The NASDAQ chart was closer to TSLA's in shape than what we see above in the QQQ chart.

With Max pain sitting at 650 and TSLA closing at 650.60, we have the setup for yet another week where the stock price "somehow" ends up within about $2 of the true max pain. Looking at the max pain chart below, puts slightly exceed calls at 650 now, and so the market makers would prefer a close above 650. OTOH, at 660 calls dominate and so a close in the 650s would be a reasonable guess. Macros could pull TSLA lower on Friday and the relative strength we saw in TSLA on Thursday could push it higher, so there's no certainty where we end up, but I'd bet a quarter that we end up in the 650s somewhere.

Usually when I see a conflict with the interests of the hedge funds (push down!) and the market makers (max pain!) the market makers usually win because they have more horsepower. I think this could be the case today. Generally, it's nice to have TSLA a bit below max pain entering a Friday because sometimes the traders provide upward pressure in the final hour of market trading.

Longer-term, I still expect some buying into the 2Q ER, a week from Monday, and so it's possible that traders could start hopping on board Friday afternoon.

News:
* This Ars Technica article looks at Taiwanese chip maker TMSE and suggests chip shortage may be easing.

Thursday's dip to 1.3% in the 10 year treasury yields should be seen as a positive for high growth companies such as TSLA with valuations based on future year earnings

Looking at a magnified view of the max pain chart, you can see puts slightly higher than calls at 650 but calls predominating at 660 and above.

Taking a look at the tech chart, Thursday's dip bottomed out at the 200 day moving average. We've only been typically getting about a day of support out of each of the support levels. Let's see if the 200 DMA has more support power than the mid bollinger band.

Conditions:
* Dow up 54 (0.15%)
* NASDAQ down 102 (0.70%)
* SPY down 1 (0.34%)
* TSLA 650.60, down 2.78 (0.43%)
* TSLA volume 20.1M shares
* Oil 71.65
* Percent of TSLA selling tagged to shorts: 43%
* IV 50.9, 6%

 

[Papafox]

TSLA chart above

QQQ chart above

Considering that the NASDAQ closed down 0.80% and auto stocks fared poorly on Friday (according to @Curt Renz ), TSLA's loss of less than 1% on Friday was about the best we could have hoped for without substantial news that would excite TSLA investors.

The worst setup going into a Friday close is a macro decline into close, which is precisely what you can see on the QQQ chart above. It's easy money for hedge funds who short-sell on the way down and then cover during the closing cross. Instead of seeing an exaggerated dip for TSLA vs. the macros, however, we saw a more benign dip for TSLA during the afternoon vs. what you might otherwise suspect. My guess is that the market makers didn't want TSLA to close too far away from the max pain price of 650 and they cushioned the dip on Friday afternoon. Pit the hedge funds against the market makers and market makers will win, typically.

The week as a whole was difficult for auto stocks and with macros. I think TSLA faired as well as could be expected. The buying to position for Q2 Earnings Report hasn't begun yet (volume was a mere 16 million shares) and such a low volume day makes TSLA a manipulation fest on an options close Friday.
Positive developments:
* News of the Model Y SR being introduced to China has set in motion LOTS of ordering, so the usual FUD about China demand should be overruled for the time being.
* Full Self Driving is available for monthly payments of $199. Wall Street generally likes subscription plans because they yield higher revenues in the long run.
* @The Accountant reminded us in the main thread that when the ability for Full Self Driving (FSD) to navigate city streets including turns, not only do we see the percentage of FSD revenue increase substantially in terms of what can be recognized as revenue in current sales, Tesla also has substantial revenues over past years for FSD that have been sitting in deferred revenues (and not affecting the profit/loss of TSLA) but those deferred revenues can now be recognized (once the button arrives). He assumes that the percentage of FSD revenues could climb from not much more than half to perhaps full recognition of FSD revenues once the autosteer on city lights feature is made available for use by FSD buyers. Thus, the piece of the pie that could not be recognized in previous years but can now all gets counted in the quarter of the feature introduction. That ought to catch the attention of lots of eyeballs.
* Some time in the coming week we ought to see some bidding up of TSLA price as investors prepare for the Q2 ER. Naturally, the market makers will try for another relatively flat week, so we'll just have to see if volume increases enough to overrule the manipulations.

Friday's 10 year treasury yields showed a very benign 1.3%. Mr. Market should be happy.

For the coming Friday's option expirations (7/23), the current max pain is 650, a number that could migrate as the week progresses. Each vertical segment corresponds with 10K contracts (600 strike is at about 33K volume).

The 200 day moving average was not called upon as support on Friday. Notice the 4 down days in a row.

For the week, TSLA closed at 644.22, down 12.73 from the previous Friday's 656.95. Considering the macros and the negative performance of auto stocks this past week, TSLA held its value pretty well. Now we can look forward to a likely record breaking (once again) earnings report a week from Monday. At some point the big dog traders and investors who know how to run a financial spreadsheet will likely do some buying and we'll see some appreciation going into the ER. Hoping you enjoyed a great weekend. I have another heavy week ahead of sick dog care, so I'll likely be more streamlined with my posts. The good news is that the old boy is doing a bit better.

Conditions:
* Dow down 299 (0.86%)
* NASDAQ down 116 (0.80%)
* SPY down 3 (0.78%)
* TSLA 644.22, down 6.38 (0.98%)
* TSLA volume 16.3M shares
* Oil 71.81
* Percent of TSLA selling tagged to shorts: 42%
* IV 51.0, 7%

 

[Papafox]

TSLA chart above

QQQ chart above

For the third trading session in a row, TSLA outperformed the NASDAQ. Several pieces of good news have recently come forward with Tesla, and combined with the approaching Earnings Report and the falling yields on 10 year treasury bonds (see chart below), there's reason for Tesla to be climbing.

On the other hand, it's about that time in the earnings report cycle for the Wall Street pirates to scare weak longs out of their shares so that the pirates can enjoy these discounted shares during the climb into the earnings report. Today we saw an over the top Mandatory Morning Dip that brought TSLA down to 621 before buyers quickly bought the dip and returned TSLA to the green before close. This was an impressive recovery, given the significantly red QQQ chart. What TSLA needs is a day with neutral or positive macros and it'll be ready to claw back some of those recent losses.

The big rumor on Monday was that Cybertruck could begin production in Austin this October. That timeframe sounds optimistic, but if the rumor is close to true it means 1) the 4680 cells are expected to be ready to go by then (just 3 months away) and 2) the issues with preparing a stainless steel vehicle for production have been addressed sufficiently. Troy Teslike received the most attention for the rumor, but actually Troy and Rob Maurer of Tesla Daiily received the tip from the same source near the same time. I think Rob's more critical reasoning might be useful here, so please check out his video at:

Egads, 10 year treasury yields fell below 1.2%. Shouldn't high growth stocks like TSLA benefit from these lower inflation expectations?

The max pain chart is similar to last week: a near tie between Calls and Puts at 650 strike and Calls dominating at higher strikes

Looking at the tech chart, TSLA opened at the 50 day moving average, bounced off the lower bollinger band, and closed above the 200 day moving average.

Conditions:
* Dow down 726 (2.09%)
* NASDAQ down 152 (1.06%)
* SPY down 6 (1.48%)
* TSLA 646.22, up 2.00 (0.31%)
* TSLA volume 20.2M shares
* Oil 66.42
* Percent of TSLA selling tagged to shorts: 43%
* IV 52.1, 10%

 

[Papafox]

TSLA chart above

QQQ chart above

I haven't been able view the TMC posts today, but here is my quick summary of what I see happening.

With 10 year treasury bond yields down yet again, the market is likely going to be moving money back into the high growth companies. Consequently, ARKK was up nearly 3% and Apple up 2.6%. These rises makes TSLA's 2.2% gains look rather light. I suspect it was macro forces that gave TSLA its green today. Looking at the other high growth stocks, they had rather steady rises as the day progressed. TSLA, OTOH, lagged in the 650 range until about 1pm, when it finally started climbing higher. Since 650 has been max pain, I suspect our local friendly market makers were capping TSLA for their own purposes. Since volume was a mere 15M shares, the effort worked for a while before the steadily rising growth stocks forced TSLA higher in the late afternoon.

The good news is that there's room for TSLA to climb higher.

News:
* Elon Tweeted that Tesla will share its supercharger network with other EVs. This move destroys part of Tesla's moat but furthers the vision of EVs displacing Ice vehicles, gives Tesla owners a chance to chat with owners of other EVs (and convert them), and gives Tesla another profit center (since Tesla can charge a higher fee for non-Tesla vehicles).

More good news for growth stocks: 10 year treasury bond yields sank below 1.25% on Tuesday

Look how nicely the 200 day moving average supported Tuesday's dip. The stock price closed just below the mid-bollinger band. Once above the mid BB, it might provide support the way it did in mid June.

Conditions:
* Dow up 550 (1.62%)
* NASDAQ up 224 (1.57%)
* SPY up 6 (1.43%)
* TSLA 660.50, up 14.28 (2.21%)
* TSLA volume 15.0M shares
* Oil 67.42
* Percent of TSLA selling tagged to shorts: 42%
* IV 49.3, 5%

 

[Papafox]

TSLA chart above

QQQ chart above

We live in interesting times. Wednesday's TSLA trading showed less than 14M shares traded, and although the NASDAQ closed up nearly 1%, TSLA closed down nearly 0.80% on a day when our growth stock indicator ETF (ARKK) closed up more than 1.5%. My feeling is that you had the hedge funds and market makers both pulling in the same direction today (downward). The hedge funds could make money shorting the afternoon dip (once volume had dried up) and the market makers may well have joined in to hold that dip and not allow TSLA to rise in the afternoon the way so many other growth stocks did. If volume remains this low, the pirates will take advantage of it, with eyes on Friday's option close. Tesla is now back within about $5 of max pain for Friday. Anyone in the room surprised that this is how they're taking advantage of the low volume?

In news:

* In the above Tweet, Elon on Wednesday adjusted expectations regarding 4680 cells. Tuesday's rumor about October production starting in Austin with 4680 cells could get investors too confident that all is solved with 4680 production, resulting in a letdown at the Earnings Report. I think Elon is striking a reasonable middle ground, continuing with plans to produce Y and Cybertruck with 4680s in Austin months from now while simultaneously Tweeting today that "we're still not quite done."

* In this Seeking Alpha article, we learned that Tesla plans to retire $1.8 billion of bond debt early. It needs to pay a premium to retire the depth, but the company will save significant cash in interest payments in future years. More importantly, by retiring debt, Tesla is improving its balance sheet, which places yet more pressure on rating companies to upgrade Tesla's bond ratings (Yeah Moody's, I'm looking right at ya).

* Tesla has sold the ultra-capacitors portion of its Maxwell Technologies acquisition (but of course retained the Dry Battery Electrode part of the acquisition).

* Wedbush analyst Daniel Ives has raised his price target on TSLA from $950 to $1000. Ives is a highly rated analyst. These price target increases become relevant once TSLA starts another major climb because then we start looking at price targets in an effort to figure out when the stock price has overshot its likely price when the rally simmers down and the dust settles.

* TMC's @st_lopes shed light on the $2B deferred tax asset benefits that Tesla has been sitting on. @The Accountant asked him to chime in.

10 year treasury bond yields bounced back a bit on Wednesday but remain low at less than 1.3% rate.

At the 650 strike price, puts slightly outnumber calls, which gives the market makers incentive to keep TSLA from closing below 650 on Friday. It's a very small difference, however.

Looking at the tech chart, the lower bollinger band is rising rapidly to provide additional support, if needed.

Conditions:
* Dow up 286 (0.83%)
* NASDAQ up 133 (0.92%)
* SPY up 3 (0.81%)
* TSLA 655.29, down 5.21 (0.79%)
* TSLA volume 13.7M shares
* Oil 70.30
* Percent of TSLA selling tagged to shorts: 41%
* IV 50.1, 6%

 

[Papafox]

TSLA chart above

QQQ chart above

Welcome to one of the most unusual weeks before earnings report that TSLA has yet to experience. Expectations of bulls is that Tesla will announce record profits that exceed consensus estimates of the analysts on Monday, July 26. What we find ourselves with is super low volume (only 15M shares traded on Thursday) and a Thursday close that is a mere 74 cents away from Max Pain of 650.

With a likely record-breaking Earnings Report scheduled for after hours on Monday, the possibility is there that if we see a run upward start and not be constrained, the stock price could potentially get away from the market makers on Friday. The MMs have done a great job of keeping TSLA closing near the max pain price week after week, so they stand a reasonable chance of doing it again. Either scenario is possible for Friday.

Factors that may affect TSLA stock price in near term:
* Shanghai production in June came out to be a bit over 30K, a number some bulls were underwhelmed about. @The Accountant in this TMC post suggests a five day holiday needs to be considered and he feels Q3 in China should be good. Rob Maurer, OTOH, suggests lower production took place in Shanghai during June because of a shortage of chips and motors (mentioned in a tip). In this video Rob suggests the motor shortage may have been a factor in TSLA choosing to release the standard range Model Y (which is a single-motor vehicle) in China just recently.
* Tesla has been awarded 400M worth of energy credits in China (which can be sold to other auto companies that need the credits for their China sales, most likely VW. Keep in mind that these credits are sold at less than $1 for $1 of credits. Maybe half the $400 million in credits could be turned into cash through sales.
* This redit thread is talking about a delivery hold on all refresh Model S and X vehicles at present. One TMC user has been contacted by Tesla about the delays and says that additional inspections are necessary.

Overall I still would expect a pop before the ER, but maybe it will be smaller than typical and take place on Monday itself. Right now the market makers have a close hold on TSLA's price but with enough volume that hold can suddenly slip.

10 year treasury bond yields jumped higher from Wednesday but still remain near 1.25%, which the market likes

Max Pain remains at 650 but puts now clearly dominate that strike price. Calls slightly dominate 655 and so a close between 650 and 655 would suit the market makers well on Friday.

Looking at the tech chart, TSLA didn't touch the 200 day moving average on Thursday, which is good because it remains as a support level for Friday's trading, if needed.

Conditions:
* Dow up 25 (0.07%)
* NASDAQ up 53 (0.36%)
* SPY up 1 (0.21%)
* TSLA 649.26, down 6.03 (0.92%)
* TSLA volume 15.1M shares
* Oil 71.91
* Percent of TSLA selling tagged to shorts: 40%
* IV 50.2, 6%