Papafox's Daily TSLA Trading Charts

[Papafox]

We exited the weekend with high expectations for the broader markets and TSLA, with futures for both the Dow and the NASDAQ up 1% on Sunday and with TSLA performing well on Friday with an upslope rising into the close. Alas, today was a "porridge too hot" day, with hot broader markets, high pre-market trading for TSLA, a mighty 190,000+ volume during the first minute of trading, and a spurt of TSLA trading above 310 before the stock settled below 307 during its low point during the typically low 10am-11am period. What would it have taken for TSLA to take off and climb skyward after breaking 310 earlier this morning? In two words, "good news". TSLA is primed to go higher should the ER contain good numbers and good guidance, but it's not ready to soar quite yet until there's an adequate reason for it doing so. Caution, though, because good news can arrive at the speed of Twitter. Look at the trading between now and May 3 as primarily the setup for the ER.

Also interesting today were the Fidelity short-seller numbers provided by @vgrinshpun over here. We saw about 100,000 net shares drawn down today, which further indicates that the spring is getting wound tighter and tighter. Just as importantly, we saw there were about 250,000 shares drawn down and about 150,000 shares covered. In other words, we continue to see during the past week or so that the resolve of the short-sellers is weakening and we're now seeing a mixture of both drawdowns and covering during a week. The stage is set for things to get very lively should the Q1 ER result in a beat and uplifting guidance.

* Dow up 216 (1.05%)
* NASDAQ up 73 (1.24%)
* TSLA 308.03, up 2.43 (0.80%)
* TSLA volume 5.0M shares
* Oil 49.21, down 0.41 (0.83%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: 107,000 shares net drawdown with 1.00% interest

 

[Papafox]

Today Tesla reached a new ATH. Congrats, longs! In many ways, the strength of today's trading was a surprise to everyone except TrendTrader007. The porridge was too hot (Dow and NASDAQ up today), after-hours trading yesterday was sketchy, Fidelity lowered its interest rate for shorting to 0.25%, 2 million shares were offered and shorts drew down nearly 700,000 shares with no covering. Add a Bank of America downgrade today and a flaming Model X story yesterday for good measure. Trading started with a dip from the short selling, but it progressed upward throughout the day. While many of us expected a SP of near or below the ATH on ER day, today's strength raises the question of how high TSLA might go prior to the ER. As both the shares shorted and the stock price grow, the chances of a squeeze following a good ER continue to grow. Don't miss it.

I'm preparing this message from an airplane and will be home tomorrow, so that we'll include a technical chart in that update.

* Dow up 232 (1.12%)
* NASDAQ up 42 (0.70%)
* TSLA ,313.79 (new ATH) up 5.76 (1.87%)
* TSLA volume 6.7M shares
* Oil 49.32, up 0.09 (0.18%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: 687,000 shares drawn down with NO covering. Interest rate fell to 0.25% with 2M shares available and the shorts took the bait before the interest rate rose back to 1.00%

 

[Papafox]

Looking at the daily chart, we see some of the sharp dips followed by immediate recoveries that are consistent with short selling. Over 1 million shares were borrowed for shorting today. Add the following items to the recipe: low volume (only 2.4M shares), a second bounce off the 313-314 price area, suggesting that bounces off two nearby ATHs defines this level as having resistance, and a Consumer Reports downgrade of Teslas vehicles, due to the delay in delivery of automatic braking on AP 2.0 vehicles. The net result was a down day for the stock, but considering the amount of short shares drawn down and comparing it to the volume, TSLA weathered the day fairly well.

Looking at the technical chart, you can see that 295-300 has been a nice support level for the stock recently. After the initial bounce off 313 a little more than 2 weeks ago, TSLA tested for a bottom (295ish) and since then has been doing a gradual climb back up to retest the ATH again. This time, however, the stock is much more confident in its role as a 300+ stock and is loitering in the 310ish area, ready for another ATH when the conditions warrant. Overall, we continue to see the stock being positioned for the ER, which is exactly one week from today.

Conditions:
* Dow down 21 (0.10%)
* NASDAQ down 0 (0.00%)
* TSLA 310.17, down 3.62 (1.15%)
* TSLA volume 2.4M shares
* Oil 49.3, down 0.26 (0.52%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: 1M shares borrowed today but not all are necessarily sold short, 1.00% interest

 

[ggr]

Yahoo finance reports volume as 4,695,044. It certainly started out slow, but not that slow...

 

[Papafox]

Yahoo finance reports volume as 4,695,044. It certainly started out slow, but not that slow...

Thanks for the update. After trading ended, I looked at Yahoo finance and saw the 2.4M volume number. I went back to that page and confirmed the number and confirmed the end of day stock price. Only after I refreshed the page again did I get the correct volume. Hmm, I see I can't trust Yahoo by itself, either. I'll compare Yahoo with my phone app for stocks and if there's a big disparity or if the number just looks crazy (such as what I sa today) I'll look for a third source.

When I was a pilot flying the Atlantic, we did "gross-error checks." We compared the numbers the inertial navigation system gave us and compared to the times and distances on our flight plan. If there was a substantial difference, chances are a number had been incorrectly input into the navigation computer. Looks like I'll need to do a gross-error check with TSLA volume anytime I see an unusually low or high number.

 

[TrendTrader007]

Thanks for the update. After trading ended, I looked at Yahoo finance and saw the 2.4M volume number. I went back to that page and confirmed the number and confirmed the end of day stock price. Only after I refreshed the page again did I get the correct volume. Hmm, I see I can't trust Yahoo by itself, either. I'll compare Yahoo with my phone app for stocks and if there's a big disparity or if the number just looks crazy (such as what I sa today) I'll look for a third source.

When I was a pilot flying the Atlantic, we did "gross-error checks." We compared the numbers the inertial navigation system gave us and compared to the times and distances on our flight plan. If there was a substantial difference, chances are a number had been incorrectly input into the navigation computer. Looks like I'll need to do a gross-error check with TSLA volume anytime I see an unusually low or high number.

4,695,000 which was -21% from average daily trading volume of 5,980,800 per Marketsmith

 

[ggr]

Yeah, yahoo finance updates the stock price (for the stock and indexes) but nothing else... you have to manually refresh to get it to update the graphs or volume etc. Anyway, sorry if I came across nitpicky.

As a fellow pilot, I understand about the gross-error check. In fact I've had to apply it in engineering meetings many times. "That's an order-N-squared algorithm. That your test case completed in 10 minutes does not give me confidence that the real problem will be solved this year!"

 

[Papafox]

Today was a lukewarm day for the broader markets, a perfect environment for TSLA to rise, and so it did in the morning. In the morning you could see apparent shorting as we saw deep dips in TSLA's chart (though green), followed by immediate recoveries. A total of 8 transitions between green and red took place today (another clue). By noon a short seller had drawn down an additional 500,000 shares and thus we saw an afternoon dip on this low volume day. The irony of the short selling a few trading days before the Q1 ER is that there's plenty of time for traders to bid the SP back up to 313 prior to the ER and any dip costs the shorts dearly. How dearly? A half millions shares is worth more than $150 million and the shorting today allowed the stock to be pulled down 1.5 points (assuming those 500,000 short shares were all deployed this afternoon. That's a cost in new short positions of $100 million exposure per $1 drop in share price. As I said before, the quantity of shorting we're seeing this week is unsustainable. Shorts are expecting a GAAP loss of 75 cents or more per share come next Wednesday and they hope to get the stock heading downhill before the ER. A more likely scenario is that TSLA bounces back to $310+ leading up to the ER and we such a much better financial performance, as suggested by luvb2b and others on this forum.

What the short sellers are missing is an understanding of the frame of mind held by the longs. We're in this stock with high expectations of Model 3 coming into production mid-year, and dips in the stock price are not frightening because we see better times ahead. The Q1 ER is just one opportunity to see a pop in this stock prior to the Model 3 reveal.

Conditions:
* Dow up 6 (0.03%)
* NASDAQ up 24 (0.39%)
* TSLA 308.63, down 1.54 (0.50%)
* TSLA volume 3.5M shares
* Oil 49.17, up 0.2 (0.41%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: 417,000 shares net drawdown that included 185,000 shares covered. Interest rate remains 1.00%.

 

[Papafox]

TSLA ended the week on a high note, with a new all time high close of 314.07. For the week, TSLA closed up from last Friday's 305.60, a gain of 8.47. This is a nice launching price going into ER week.

Luvb2b has pointed out that although some tech stocks have seen somewhat constrained reactions to positive earnings reports this quarter, some stocks that have been heavily shorted have jumped 20% or more.

Looking at the technical chart, you can see that the upper bollinger band has not been the limiting factor for some time. Rather, TSLA had to slowly climb back to 313 after setting that high mark weeks ago and reclaim the high with confidence. It has done so today. I wouldn't be surprised to see TSLA test higher prices on Monday.

Conditions:
* Dow down 41 (0.19%)
* NASDAQ down 1 (0.02%)
* TSLA 314.07, up 5.44 (1.76%)
* TSLA volume 4.4M shares
* Oil 49.14, up 0.17 (0.35%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: NA

 

[Papafox]

Here's the after-hours trading for Friday. Notice the uptick and the new intra-day ATH of 315 set about an hour after close. I also found the descent of the SP about the 12 noon twin peaks and after the 2:45pm peak to be interesting because they have much in common. Notice how the stock price is walked down from the peak, notice the attempts at level trading (capping) but in both cases the capping is not successful and a slight upward slope is turned into another rally at some point. I'm thinking we saw efforts by shorts to minimize the climb on Friday and that both of these efforts eventually failed.

 

[zdriver]

I think the capping we saw late in the day was primarily someone(s) with a vested interest in keeping it below the 312.50 calls, coupled with the effects on delta hedging of closing out those suddenly ITM calls, else that's a hell of a coincidence given it seems to have been pushed exactly to there and held. (which almost worked...)
Same may have been the case for stopping before $315 - as I mentioned in my post yesterday on OI, the "wall" of calls really starts to matter at $315, so there was a lot at stake if it kept running into the end of the day.

Monday could be quite interesting.

 

[Papafox]

Most of us expected a good Monday, and we sure weren't disappointed. Two notable trades on the chart were buy/sell on open and buy/sell on close, which accounted for 181,000 and 166,000 shares traded, respectively. I see these trades as being done by large entities that wish to accumulate without affecting the stock price too much, and for this reason I see them as bullish. I notice the several plateaus in the vicinity of 326.50, which looked like capping by shorts. I felt we'd see the stock climb higher and break the cap if the volume picked up in late afternoon, but before it did traders began taking profits and so we saw an afternoon dip. The 300,000 shares volume during 1 minute in after-hours trading is likely an anomaly because it was not accompanied by a significant change in the stock price.

Wednesday of the ER is typically a red day and with today's big gains we might see profit-taking on Tuesday. On the other hand, you can see enthusiasm for the stock creeping back in during after-hours trading, and we might see a combination of a morning climb followed by afternoon profit-taking tomorrow. Everything right now is concerned with positioning for the ER. The odd thing is how short positions continue to increase at a rather brisk pace, even with this bull run. Will a good ER shake the shorts and cause them to start covering? My guess is that it'd take not only good numbers but also good guidance to see substantial covering begin. Shorts are likely receiving their TSLA news from faulty sources such as the mainstream media and SA, and it'll take quite a shock to change their views. No doubt the margin calls which shorts will receive this afternoon and tomorrow will contribute to the change of attitude needed for covering their positions.

On the technical chart, you can see the slow return to 313 over a nearly 3 week time span, leading to yesterday's breaching of that level. Thus, TSLA was cleared to run today, which it did. Meanwhile, the upper bb has retreated but I suspect the upper bb is far less a factor to traders at the moment than positioning for the ER on Wednesday. If the SP does indeed retreat to the upper bb prior to the ER, it will be set up for a nice climb should the ER be as positive as some on this forum believe it will be.

Conditions:
* Dow down 27 (0.13%)
* NASDAQ up 44 (0.73%)
* TSLA 322.83, up 8.76 (2.76%)
* TSLA volume 8.4M shares
* Oil 48.75, down 0.58 (1.18%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: Net of 375,000 shares drawdown with some covering, interest 1.00%

 

[Papafox]

As expected, it was up and then down today. The up was suggested by the enthusiasm shown in after-market trading yesterday, and the down was simply investors and traders taking profits before the uncertainty of the ER. If shorting behavior was typical today, then shorting would be part of the answer too. TSLA briefly hit a new intraday ATH above 327 during its enthusiastic run up on opening. With so much money already made, it was expected that some investors would try to beat the market's ER day negative trading by exiting a day or two early. This is all about positioning for the ER. Friday's stock price depends upon the results of the ER and the guidance given.

Here's a humorous story for those of you who just missed a trade by a whisker. I felt there was a reasonable chance of a first-hour rally, and so I set a price target for 327 and went to sleep. Sure enough, 4 minutes after open, at exactly 3:34am Hawaii time, I'm waken with the alert. "Great," I think, "I'll sell some of my J19 120s and wait for the dip to buy my J19 150s in a neutral move to harvest some cash. Alas, by the time I went into the office and fired up the computer, TSLA had already started dropping and before my eyes I saw it hit $321. It was a good idea, but man, one has to be quick on a day like today to take advantage.

Taking a look at the technical chart, you can see that TSLA spent no more than 2 days above the upper bb before returning below it. This is reasonable behavior when there is a lack of news. When there is news (such as ER results or with some type of short squeeze starting to materialize), then the upper bb will be largely ignored until trading starts to come back to an equilibrium.

What does tomorrow hold? There's certainly the possibility of some more profit-taking, but I tend to agree with TrendTrader007 that we might see TSLA close up for the day. My reasoning is that those traders who have done their homework and are anticipating a beat on tomorrow's ER will want to pick up some more shares, knowing this is the best price they're going to get before the ER. Meanwhile, the investors who are inclined toward profit-taking have likely considered doing so yesterday or today. There's little reason to wait for Wednesday if that's your goal. We'll see, but I wouldn't be surprised to see the SP rising going into close tomorrow.

Conditions:
* Dow up 36 (0.17%)
* NASDAQ up 4 (0.06%)
* TSLA 318.89, down 3.94 (1.22%)
* TSLA volume 5.1M shares
* Oil 47.62, down 1.22 (2.50%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: NA

 

[geneclean55]

Maybe a little volatility around Fed report tomorrow, that people might be able to take advantage of for last minute TSLA options/stock transactions before ER.

 

[Papafox]

Today was the 1Q ER day. Losses were deeper this quarter than analysts expected, and so the stock price fell after the letter was released. TMC members misguessed the quarter's performance in large part because of a misread regarding how SolarCity finances would impact Tesla. Overall, the company is performing well, but we didn't see the help from either ZEV credits or SolarCity that we had been hoping for. Revenue is double last year's first quarter, which is a common headline, Model 3 is on track, Gross Margins are approaching 30% on Model S and X as well as Tesla Energy products. We're told that later this year we can expect a major expansion of Tesla Energy. Overall, we see the kind of losses that come from a successful company expanding quickly. We received a bit more color about the Tesla Semi, which is expected to be relatively easy and economical to build and should offer the kind of efficiencies that will bring lots of buyers. Bottom line: the future looks bright for Tesla but the ER was a disappointment on earnings. The stock's resilience after the losses were announced suggests that most investors are focused on Model 3's upcoming release.

What to expect for tomorrow? The shorts will, of course, try to spin the negatives as far as they can go, as witnessed by the resident trolls on the other threads today after the letter was released. Let's hope Fidelity is kind and limits the availability of shares to short tomorrow, because the shorts thrive in an environment where there's ambiguity and we have that temporary situation with larger than expected losses but also with recognition that Tesla is on track to release Model 3 on time and evolve into a profitable entity. Short term could be a bit stormy for longs, but once the stock starts recovering, it can do so quickly and caution is advised for those who plan to play the dip.

Conditions:
* Dow up 8 (0.04%)
* NASDAQ down 23 (0.37%)
* TSLA 311.02, down 7.87 (2.47%)
* TSLA volume 7.1M shares
* Oil 47.65, down 0.17 (0.36%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: NA

 

[joefee]

Sold before earnings and may re-enter @ 293. Thank You ... Shorts have paid for my Sig and now enough for my Model 3!

However, the big laugh is on me .... if I only kept my original 2,000 shares @ $22 instead of trading OMG!!!!

 

[joefee]

293 it is!

 

[Papafox]

Today was a game of "The Price is Right" with bears and bulls trying to determine how much of a discount to apply to TSLA due to the larger loss than expected on the Q1 ER. It turns out that the answer at this moment is an even 5%. With bulls reluctant to let the price slip below $300, we may see ourselves back above that number shortly. Volume was unusually high at 14.2 million shares traded. Please note that today oil fell almost as much as TSLA with a 4.81% decline with a rather neutral macro environment.

As for tomorrow, we may see Fidelity and other sources start feeding the shorts greater numbers of shares and volume will be lighter, so that's the negative. The positive is that TSLA is on track for delivering Model 3 on time so far and gross margins looked pretty impressive in the ER, which suggests that with sufficient economies of scale, Tesla is going to succeed with their plan. I didn't see anything in the ER that would scare a big investor away. Taking a look at the after-hours trading, you can see the SP creeping up, which bodes well.

Conditions:
* Dow down 6 (0.03%)
* NASDAQ up 3 (0.05%)
* TSLA 295.46, down 15.56 (5.00%)
* TSLA volume 14.2M shares
* Oil 45.52, down 2.3 (4.81%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: 142,000 shares drawdown, 1% interest

 

[Papafox]

Congratulations longs who held strong through yesterday's dip and those of you like Joefee who successfully played the dip. Today's 4.36% climb nearly offsets yesterday's 5% drop. TSLA is still down for the week, from last Friday's 314.07 to today's 308.35, a loss of $5.72, but we're all pleased with how quickly it recovered from yesterday's dip. What the recovery tells us is that the market now has a better understanding that Wednesday's ER showed that TSLA was basically on track except for a lack of ZEV credits and weakness at SolarCity. One particularly bullish aspect of today's trading is the strong rise going into close and the stock hitting its high in the middle of after-hours trading, which seldom happens except when news prompts the rise.

Looking at the technical chart, you can see the upper bb at 321.06, which gives the stock lots of headroom to rise next week. Further, look at the close today, which was above the gapped down beginning of trading yesterday. That's an impressive recovery. Have a good weekend.

Conditions:
* Dow up 55 (0.26%)
* NASDAQ up 25 (0.42%)
* TSLA 308.35, up 12.89 (4.36%)
* TSLA volume 7.9M shares
* Oil 46.22, up 0.7 (1.54%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: 53,000 shares drawdown in morning, 1.00% Note: I suspect we'll see some net covering when afternoon is included.

 

[MitchJi]

What the recovery tells us is that the market now has a better understanding that Wednesday's ER showed that TSLA was basically on track except for a lack of ZEV credits and weakness at SolarCity. One particularly bullish aspect of today's trading is the strong rise going into close and the stock hitting its high in the middle of after-hours trading, which seldom happens except when news prompts the rise.

I believe that the market thinks that the zev credits and Solar and TE are mouse nuts. I think that in Q2 or Q3 when TE starts to ramp that will be an added catalyst. Same with Solar panels and tiles but the timing for Solar is unknown.