Papafox's Daily TSLA Trading Charts

[MitchJi]

The biggest difficulty with trying to use technicals or cycles to time the market is that news can overpower expectations in the flash of a tweet. For example, we've seen a lack of Model 3s turned out in the past week or so. Is Tesla tweeking the production line? Very possibly. Should Tesla start to roll out Model 3s at a much higher clip after these tweeks and Elon suggests so in a tweet, the stock runs way up very quickly. These are the challenges of trading a bipolar stock.

I think we've all figured that out. I sent Michael an email asking for clarification about his buy signal, which I thought was about $349:

the trend is down but more neutral since there still is a big series of higher bottoms since the July low so you want to see the Oct 3rd low broken. You can anticipate that but seeing a penetration of the 'high of the low bar' buy signal which is that 349 but to be conservative I'd use the prior days low at 344. The other thing to consider is that the big swing from Dec to June was roughly 6 months so a correction from that high might be 50% in TIME so a three month decline or CONSOLIDATION could end the correction and that's where we are now, so the Jury is still out on the long term trend. If it really is repeating the 'fractal' from April to August 2016 then we will see another four months down and all rallies will be feeble. If you see an impulse wave up (big elongated bars up) then the trend is turning back up to the highs and could take them out. Right now it's a 30 point scalp either way until it settles down and gets past Fidelities year end on Oct 31st when they can legally sell if they want to.

I decided to wait. I believe that the remainder of his email might be of interest. Place your bets .

 

[ValueAnalyst]

I think we've all figured that out. I sent Michael an email asking for clarification about his buy signal, which I thought was about $349:

the trend is down but more neutral since there still is a big series of higher bottoms since the July low so you want to see the Oct 3rd low broken. You can anticipate that but seeing a penetration of the 'high of the low bar' buy signal which is that 349 but to be conservative I'd use the prior days low at 344. The other thing to consider is that the big swing from Dec to June was roughly 6 months so a correction from that high might be 50% in TIME so a three month decline or CONSOLIDATION could end the correction and that's where we are now, so the Jury is still out on the long term trend. If it really is repeating the 'fractal' from April to August 2016 then we will see another four months down and all rallies will be feeble. If you see an impulse wave up (big elongated bars up) then the trend is turning back up to the highs and could take them out. Right now it's a 30 point scalp either way until it settles down and gets past Fidelities year end on Oct 31st when they can legally sell if they want to.

I decided to wait. I believe that the remainder of his email might be of interest. Place your bets .

Can you elaborate on the part about fidelity's year-end? Why couldn't they sell before oct 31?

 

[MitchJi]

The biggest difficulty with trying to use technicals or cycles to time the market is that news can overpower expectations in the flash of a tweet.

I think we've all figured that out. I sent Michael an email asking for clarification about his buy signal, which I thought was about $349:

We both made a mistake. When I asked Michael how he determines his "cyclic turns" he said it's a proprietary method. Looking at the results reminds me of the Jesse Livermore Union Pacific story. He uses technical indicators to determine the timing and direction of the trades, but there's something more going on. Watching the results (when there are any) often seem like magic.

 

[MitchJi]

Can you elaborate on the part about fidelity's year-end? Why couldn't they sell before oct 31?

Sorry, but I don't know anything more about that.

 

[Papafox]

Today was a lightly down day for the broader markets and a day when TSLA largely followed the trajectory of the broader markets but at a more positive level. It's interesting to look at the deviations, however.

NASDAQ

TSLA

Note the very substantial thrust upward by TSLA just prior to 10 am. That run was capped and we saw level to slight-decline while the NASDAQ continued in a more upward fashion, but bulls broke the cap about 11 am and TSLA came within 40 cents of 360 before starting a slow decline. Notice at the very end of the day that the NASDAQ recovered some losses in the final 15 minutes but TSLA lagged behind in a sticky dip. The low volume today allowed shorts to amend the stock's trajectory a bit, but TSLA is creeping closer to 360, which could lead to a break-out upward, some of our technically-oriented traders are saying. On the negative side, a recall to inspect rear seat cable tension will affect 11,000 Model Xs, but the fix should be an inexpensive one for Tesla.

Conditions:
* Dow down 32 (0.14%)
* NASDAQ down 12 (0.18%)
* TSLA 355.68, up 1.08 (0.30%)
* TSLA volume 4.1M shares
* Oil 50.77, up 0.17 (0.34%)

 

[sunhelm]

Sorry, but I don't know anything more about that.

There's got to be something there since the seasonality chart shows October always ends up with a lower SP than previous month.

 

[Papafox]

After catching up with the news, it turns out that the dip in the final 10 minutes of trading that I thought was a sticky dip on steroids turned out to be the small recall notice of 11,000 Model Xs that need to have a back seat cable tension tested and possibly adjusted. No big deal.

Since then I see the aftermarket trading heading lower, which would indicate a red start to the day's trading tomorrow. On the other hand, volume at 4:00pm for the end of day trading was a very robust 145,000 shares, which suggests buyers see an opportunity to pick up shares at this temporary discount and are doing so. I'll be interested to see what we get in the morning.

 

[Papafox]

NASDAQ daily chart

The bipolar character of TSLA continued today as the stock spent the whole day jumping back and forth between green and red on unusually low volume. At 2:19pm a massive volume spike of 59,000 shares within a minute traded hands (with one 48,000+ share dark pool order), but with very little resulting change in price. Heading into the afternoon, we saw near-horizontal trading (which normally strikes me as capping by shorts) but in this case the NASDAQ fell going into the close but TSLA did not (suggesting that someone was buying to keep the stock price just above 355). Who knows, maybe a market maker had sold lots of 355 puts that close today and didn't want them to be exercised.

Looking at this week's short volume, we can see that although the volume descended as the week went on, the short percentage of trading rose slightly to today's 62%. Normally, high trading by shorts and low volume would give shorts the advantage in manipulating the stock, but today it looks like market-makers owned the afternoon.

Meanwhile, TSLA keeps returning to the 355-360 trading range, as it flies in a holding pattern awaiting news about Model 3 ramp.

For the week, TSLA closed at 355.57 down 1.31 from last Friday's 356.88. Enjoy your weekend.

Conditions:
* Dow up 31 (0.13%)
* NASDAQ up 14 (0.22%)
* TSLA 355.57, down 0.11 (%)
* TSLA volume 3.5M shares
* Oil 51.42, up 0.82 (1.62%)

 

[Papafox]

The drop in TSLA this morning may well have been caused by concerns about the ramping up of Model 3, the same type of concerns expressed in these forums over the weekend. At about 11:30 am TSLA started climbing quickly, which could well have been caused by grapevine communications about the Oppenheimer note which came out shortly thereafter and said that talks with Tesla management revealed that the Model 3 bottlenecks were primarily caused by problems with a small number of suppliers. This revelation should indeed have a positive effect upon the stock price since it eliminates much worse possibilities for the delay, such as really significant production line problems or (even worse) the inability to produce the necessary batteries.

Alas, as the day progressed into afternoon, TSLA descended in price several dollars during the light trading hours, a time when the short-selling strategy of slow descent into close works well. Furthermore, we saw a small recovery and then absolutely horizontal trading (the likes of which I have never seen with TSLA) for nearly two hours. My thoughts? If you look at the NASDAQ chart below you can see a significant climb of the NASDAQ in afternoon hours, into close. With two positive catalysts (an analyst note that suggests rather benign reasons for the Model 3 ramp up delays plus a rising NASDAQ) the horizontal trading was likely the result of capping by shorts (rather than what we saw on Friday).

NASDAQ trading chart for today

Take a look below at the www.shortvolume.com chart for TSLA. Today nearly 64% of trading was done by shorts, which is consistent with a significant by shorts at capping this afternoon. Consider, too, that much of this morning's selling could have been done from one long to another as weak longs sold to more confident longs. If so, then the afternoon trading would have to be heavily dominated by shorts in order for the day's percentage of trading to be 64% done by shorts.

Now, the plot thickens. For the first minute of trading today we saw a very robust 102,000 shares trade hands, and in the final minute of trading, we saw a huge 252,000 shares trade hands in a minute. Although there are multiple reasons why investors buy or sell on open or on close, one characteristic of these trades is that they do not typically affect the stock price much for the day. So, perhaps we have a big investor acquiring shares with the hope of not changing the stock price too much during the acquisition, or perhaps we have some big-dog shorts who sold a large number of shares today to bring about this afternoon's horizontal trading when TSLA really should have been rising, and they were using the final minute of trading to close those short positions and reload for tomorrow. If tomorrow morning's volume is high enough, though, perhaps today's news from Oppenheimer will coax TSLA higher.



Conditions:
* Dow up 85 (0.37%)
* NASDAQ up 18 (0.28%)
* TSLA 350.60, down 4.97 (1.40%)
* TSLA volume 5.4M shares
* Oil 51.92, up 0.47 (0.91%)

 

[ggr]

I think that flat line you comment on is something wrong or missing from your data... Yahoo finance doesn't show it, although it was close to flat from 3:00 to 3:45 (EDT), part of which shows in your data too.

 

[zdriver]

Given the short volume, I wonder if the extra 200k shares bought at 4:00:09 was short covering from intraday shorting...

From my post in market action -

If memory serves, the MOC (market-on-close) order was 250k shares to-buy, followed 9 seconds later (4:00:09) by a 200k share order at the same price as closing, that thinkorswim marked as a buy. (ask side)

The former is normal, albeit about double-ish the normal quantity. MOC orders for TSLA hasn't been very predictive from what I've seen, but I haven't done very extensive stats on it. The extra order was a thing right after the big July drop too as I recall, but we never really decided what it meant. Probably just more chop chop chop like we've seen for the past few months...

 

[geneclean55]

If so, I wonder why shorts left it so late to cover. Not a usual tactic, right?

 

[zdriver]

If so, I wonder why shorts left it so late to cover. Not a usual tactic, right?

Quite normal actually. There's more liquidity closer to close - meaning you can buy or sell a lot more without impacting the price, vs other times of the day.

 

[geneclean55]

Sorry, I didn't explain my thought fully. You are correct of course. I meant at that high volume. 250k plus the 200k right around the close.

But it has happened before as you say. So prob nothing to get too excited about.

 

[zdriver]

Sorry, I didn't explain my thought fully. You are correct of course. I meant at that high volume. 250k plus the 200k right around the close.

But it has happened before as you say. So prob nothing to get too excited about.

Yeah, 100k+ has not been uncommon.

 

[Papafox]

Today was a nice UP day for TSLA in an environment where TSLA does well: neutral macros and good news for TSLA. Volume of 3.3M shares was unusually low today with market open at 39,000 shares traded and close at 48,000 shares, respectively. The Oppenheimer note about a few suppliers being the cause of the Model 3 ramp up delays (and therefore a smaller problem than might otherwise exist) likely added upward pressure to trading this morning, and it was assisted by new sightings of previously unseen Model 3s in the wild, including an Instragram message from Kimball Musk featuring his gorgeous blue Model 3. A particularly positive message from a Piper Jaffray's analyst that nobody can compete with Tesla in China added fuel to the day's upward movement.

The consolidation below 360 continues, and resistance TSLA has hit as it approaches 360 is no doubt affected by efforts of the shorts to prevent this transgression because multiple technical traders have suggested that once TSLA climbs above 360 it will be ready to break higher. Let's hope that the catalyst that sends TSLA above 360 is word that the Model 3 bottlenecks are falling by the wayside and volume production is beginning because such news should prevent a third 380ish run and retreat. Tesla naming a date for the 3Q ER sooner rather than later could be seen as a positive sign of production ramp up because Elon no doubt wants to give positive responses to the inevitable questions by analysts about Model 3 ramp up.

Conditions:
* Dow up 40 (0.18%)
* NASDAQ down 0 (0.01%)
* TSLA 355.75, up 5.15 (1.47%)
* TSLA volume 3.3M shares
* Oil 52.01, up 0.14 (0.27%)

 

[Papafox]

The battle to retake 360 continues tomorrow as TSLA exceeded 360 for most of the day but gave up ground in the final 20 minutes of trading as the NASDAQ took a nosedive (see below) and TSLA followed. Looking at the TSLA chart, you can see a small mandatory morning dip, followed by a quick ascent to 362. From there, you can see what appears to be the shorts walking the stock price down with selling, but once it dipped below 360, buying picked up and up she went again. It's good to see that the dip at the end of the day was not Tesla-related.

Look at the big NASDAQ dip in final 20 minutes which brought TSLA lower as well

Was today's buying mostly shorts covering or longs (in particular, institutional investors) loading up? Take a look at the shortvolume.com image:

The short percentage of trading dipped to about 52% today, hinting that today's trading was just as much about longs accumulating as it was shorts covering. These numbers support Curt Renz's view that the today's trading looked like it had the earmarks of an institutional investor loading up. Zdriver's observations of dark pool trading show shorting earlier in the day followed by a shift to covering.

The bottom line is that 360 is an important number because closing above it suggests a break out, and if that happens technical trading longs are likely to start jumping in. The arrival of new longs leads to the stock rising further and shorts start covering which starts a very nice cycle. For this reason, sitting on the sidelines waiting for a deep dip looks like a questionable tactic at this point.

Conditions:
* Dow up 160 (0.70%)
* NASDAQ up 1 (0.01%)
* TSLA 359.65, up 3.90 (1.10%)
* TSLA volume 4.9M shares
* Oil 52.27, up 0.01 (0.02%)

 

[Papafox]

With no negative news of consequence today and upward momentum, TSLA lost $10 early in trading before recovering some of the loss. I would call this an exceptional bear attack that shows the shorts are very interested in keeping TSLA from closing above 360. In today's case, shorts leveraged a dip in the broader markets to achieve their objective.

The day started with a dramatic cliff dive of a dip, which bottomed out around 10 am, so we saw a mandatory morning dip. Although the DOW eventually recovered into positive territory and the NASDAQ only lost 0.29% by end of day, we certainly can call this a dip on steroids. Look at the significant horizontal trading (suggesting capping) at around 351 around noon time and around 352 for most of the rest of the afternoon even though the NASDAQ was steadily rising throughout the day. We can call this a sticky dip. Taken all together you see before you the first Mandatory Morning Sticky Dip on Steroids ever witnessed in the wild. Please see the NASDAQ chart below.

NASDAQ: After bottoming out about 10 am, the NASDAQ rose steadily for the remainder of the day

Interestingly, zdriver reported solid buying in the 349-350 range which he says indicates a large order in that vicinity. Try as they might. the shorts could not penetrate 350 for more than short periods before the stock bounced back. The moderately-low volume today suggests that longs weren't overreacting to the selling pressure that the shorts were generating.

Where do we go from here? The manipulations are so intense with this stock that it's hard to predict on a day to day basis, but evidence is mounting that Tesla is working out the bottlenecks of Model 3 production and when word of volume Model 3 production comes, there will be no holding this stock back from its upward trajectory. Here's the latest clues that Model 3 may be ramping up:
* An upturn in Model 3 sightings over the past week
* Tesla announcing today that the 3Q ER will be held in less than two weeks on Nov 1. Elon doesn't want to stand before the analysts and report that the bottlenecks still exist, and so a schedule of the ER for a date less than 2 weeks ahead strikes me that Elon has confidence he will have good news to report about the Model 3 ramp.
* A growing number of registered VIN numbers

Bottom line: Skillful manipulation days like today can buy the shorts some time, but inevitably good news is coming, and when it does TSLA runs up to a price which is really not affected by the mischief we see on days like today. Perhaps the intensity of the effort by shorts to sink TSLA today is due to the growing perception that we're getting closer to substantial positive news about the Model 3 ramp up, and that news will propel the stock to new highs. Tick, tick, tick.

Conditions:
* Dow up 5 (0.02%)
* NASDAQ down 19 (0.29%)
* TSLA 351.81, down 7.84 (2.18%)
* TSLA volume 5.1M shares
* Oil 51.63, up 0.12 (0.23%)

 

[D-egg-O]

Mandatory Morning Sticky Dip on Steroids

 

[bdy0627]

I tend to think the bears are doing us a favor keeping this breakout in check for a bit. Otherwise, in the absence of compelling suggestions that the Model 3 ramp is nearing vertical, I could easily see us repel down from the $380s. If signs of the ramp are there, which could come even in the next couple of weeks, it's going to be brutal to be short at that point. Great job again, Papafox!