Papafox's Daily TSLA Trading Charts

[GoTslaGo]

So all this discussion yesterday about Dan Zander’s TBA of 360 got me wondering if yesterday was a bit of a bull trap. Basically the SP hovered around and slightly above 360 yesterday, ultimately closing just a smidgen below 360 (359). Then today was a red day down to 348-350.

Almost as if someone was moving the stock up to 360s, baiting longs—only to pull the rug out today. That being said, I suspect yesterday’s price action likely inspired waiting longs to start getting back in, hence the support at 350 or so. Oddly enough, last night I checked max pain for Friday and it was 350. Just checked right now, and it is 352.50.

 

[Papafox]

So all this discussion yesterday about Dan Zander’s TBA of 360 got me wondering if yesterday was a bit of a bull trap. Basically the SP hovered around and slightly above 360 yesterday, ultimately closing just a smidgen below 360 (359). Then today was a red day down to 348-350.

Almost as if someone was moving the stock up to 360s, baiting longs—only to pull the rug out today. That being said, I suspect yesterday’s price action likely inspired waiting longs to start getting back in, hence the support at 350 or so. Oddly enough, last night I checked max pain for Friday and it was 350. Just checked right now, and it is 352.50.

In theory, some strong traders could have bought shares to get the upward movement going and then sold every time the stock price bumped up against 362 for a very lucrative trading day. It would be the sort of manipulations I accuse thew shorts of, but in reverse. I am open minded to believe there are more manipulations out there than we are aware of. That said, a fair amount of buying would be necessary to get the share price started in a steep climb for its initial run to 362 yesterday. In theory, some clever big dog traders could have bought to get the run going upwards yesterday morning, allowed other traders (longs and scared shorts) to push it the rest of the way to 362, then the original traders could have sold around 362 until their shares were exhausted, then switched to shorting the stock for the rest of the day and today. The biggest problems I see with this scenario being run by shorts is that once the stock starts running above 360, there may be no way to stop it with available resources, and 2) no one could have foreseen the NASDAQ deep dip in the final 20 minutes of trading yesterday. Without that end of the day dip yesterday, and without the steep NASDAQ dip that bottomed out at 10am today, the bull trap might not have worked. We'll never know what transpired for sure, but it is fun to guess and then find reasons why our guesses might not work.

My overview of what transpired yesterday and today is this. Shorts lost control of the stock price yesterday, due to its rapid rise and even though they walked the price down twice before late afternoon, longs kept bidding the price up. Fortunately for the shorts, the NASDAQ dipped significantly in the final 20 minutes and shorts were able to add some steroids to the dip in order to ensure that TSLA closed below 360. This morning the shorts awoke to a lovely present under the Christmas tree. The NASDAQ was dipping significantly after open, and shorts (some of whom might have been sitting on the sidelines) saw the combination of this price point (they believe that 360 may be the top of the present trading range) and the dropping NASDAQ as a great opportunity to enter new short positions. Those shorts with significant short positions in TSLA then capped the SP at 351 and later at 352 to keep it from rising today.

 

[kenliles]

So all this discussion yesterday about Dan Zander’s TBA of 360 got me wondering if yesterday was a bit of a bull trap. Basically the SP hovered around and slightly above 360 yesterday, ultimately closing just a smidgen below 360 (359). Then today was a red day down to 348-350.

Almost as if someone was moving the stock up to 360s, baiting longs—only to pull the rug out today. That being said, I suspect yesterday’s price action likely inspired waiting longs to start getting back in, hence the support at 350 or so. Oddly enough, last night I checked max pain for Friday and it was 350. Just checked right now, and it is 352.50.

The NASDAQ was dipping significantly after open, and shorts (some of whom might have been sitting on the sidelines) saw the combination of this price point (they believe that 360 may be the top of the present trading range) and the dropping NASDAQ as a great opportunity to enter new short positions. Those shorts with significant short positions in TSLA then capped the SP at 351 and later at 352 to keep it from rising today.

Add to that, Yesterday was macro driven in general. The surprise Leading Economic indicator sudden unexpected drop was nearly all hurricane related (if you deeper dive into the data- not coincidentally my opportune to convert common to DITM LEAPS at the $248 trough). That realization pulled the market back over the day although TSLA didn't recover fully (no doubt due to P-Fox analysis of short players).
I rarely incorporate short term events into my trading- but was on the watch for this one

 

[Papafox]

Folks, every now and then the dragon has a good week. Our day is coming. The FUD for the last few days has been truly phenomenal. Shorts and the folks who support them are putting in a major effort right now because those shorts who are still underwater are looking for one last chance to extricate themselves before Model 3 ramps up and the stock responds appropriately. Today TSLA closed at 345.10, down 10.47 from last Friday's 355.57.

Let me run through what happened today, it was no surprise. The broader markets were happy and opened up. TSLA briefly traded above 354 but then the short-selling began. Traders saw there wasn't money to be made and shifted cash to stocks that respond more reliably to a big up day for the market and TSLA dipped further. After several downward stabs, TSLA started recovering as longs took advantage of the discount prices and it looked like we were going to close above 350, but then the NASDAQ started giving up some (but certainly not all) of its gains about 2:30 pm and the shorts used this decline to engineer a dip on steroids for TSLA. Ho-hum.

Looking at the past three weeks of trading, you can see TSLA has for the most part been rangebound between about 344 and 360. Light volume today suggests longs are waiting for news about Model 3 ramp before making big moves. With manipulations as significant as they are at present, please don't assume anything and gamble on short term bets. Dips are great opportunities to accumulate stock and long-term calls, though. It's all about Model 3 ramping up. Keep an eye on the delivery VIN numbers of new Model 3s spotted in the wild. When we see VINs increasing hundreds of numbers per week, we'll have pretty good evidence that the bottlenecks are falling by the wayside.

Meanwhile, the shorts weren't so quiet. They accounted for about 61% of today's TSLA trading. The low volume assisted them in their tactics today.

Have a good weekend.

Conditions:
* Dow up 166 (0.71%)
* NASDAQ up 24 (0.36%)
* TSLA 345.10, down 6.71 (1.91%)
* TSLA volume 4.9M shares
* Oil 51.84, up 0.33 (0.64%)

 

[Intl Professor]

You have a wondrous style with such sane comment. Almost like meditation needed for all the thunderFUD these days. There was a lot of calm in the translation of the M3 Russian drive. Thanks.

 

[neroden]

Add to that, Yesterday was macro driven in general. The surprise Leading Economic indicator sudden unexpected drop was nearly all hurricane related (if you deeper dive into the data

Interesting. This could cause some long term "spooking" in the market, since we know that global warming is causing more stronger hurricanes, so this may be the *new normal*. Or maybe the Street hasn't processed that yet....

 

[Papafox]

Today the broader markets had a downhill run, which brought TSLA lower, as well. The day began with the common Monday morning exuberance, as illustrated by pre-market trading above 350. The shorts went to work, accounting for about 59% of today's TSLA trading, according to shorvolume.com. A game of "bop-the-mole" ensued until the broader markets showed weakness. Although we all have seen the dips on steroids that are so common to TSLA these days (shorts selling on the downhill run when broader markets are descending so as to accelerate TSLA's decline, many are not aware of how the shorts cap TSLA during times when the broader market is gaining ground. Please see the NASDAQ image below. You can see that between 11:30am and 1pm, the NASDAQ was gaining ground. Looking at TSLA from noon until about 2pm, you can see TSLA trading horizontally (because of capping) to prevent it from running up with the broader markets. Then at 2:16pm, 20,000 shares were sold in a minute to push TSLA lower and take advantage of the afternoon's lower volume. If you are a long and wish to dispose of some shares, you wouldn't sell 20,000 of them in one minute unless there was some breaking news, which there was not.Thus, you see TSLA trading reasonably well for the first half of most days and then taking an afternoon dip towards close when volume is light. It's classic short manipulation.

How low do we go? Technical traders are saying 336 is strong support, based upon it being the bottom of two previous dips. Naturally, shorts will try to push TSLA below 336, but they'd probably have to have help from the macros to do so. As we get closer to Wednesday of next week (3Q ER day), you can expect to see some longs and shorts buying in, betting on the possibility of a 3Q ER results and message that will pull TSLA out of this dip.Ultimately, though, Tesla needs to prove that the Model 3 bottlenecks are behind us by shipping enough cars to customers that we see the VIN numbers increasing hundreds each week.

Conditions:
* Dow down 55 (0.23%)
* NASDAQ down 42 (0.64%)
* TSLA 337.02, down 8.08 (2.34%)
* TSLA volume 5.7M shares
* Oil 51.93, up 0.03 (0.06%)

 

[Papafox]

Sorry for the late post. I was traveling well into the early morning hours. On Tuesday, TSLA wanted to climb higher. Despite three weak mandatory morning dips, TSLA managed to climb above 342 during the morning hours. The afternoons, once again, belonged to the shorts, as steady downward pressure on the stock in the afternoon, particularly in the final half hour, erased most of the day's gains. Look back over the past week and you see this pattern of shorts taking advantage of the low-volume afternoon hours to compromise the morning's gains or to continue pressure on the stock.

Conditions:
* Dow up 168
* NASDAQ up 12
* TSLA up 0.32
* TSLA volume 4.5M shares

 

[Papafox]

Today was the classic sticky dip on steroids day to which future similar manipulations by the shorts will be compared. A dip of the NASDAQ that bottomed out at about 12:30pm was the instigator of the dip, but TSLA dipped far more than the NASDAQ in terms of percentages, and when the NASDAQ began a recovery, capping by shorts prevented TSLA from rising with the broader markets. The net result is that the NASDAQ closed down about half a point while TSLA closed down about 7 times that amount. It was a rather masterful piece of manipulation, but no doubt the shorts used lots of ammo to bring it about.

Normally, I expect to see a day when the manipulations by the shorts are failing to suggest a turn-around from a prolonged dip, and maybe that is what we'll see that tomorrow. However, the market is waiting for confirmation that the Model 3 bottlenecks are falling away and when that confirmation comes the stock will have lots of velocity as it works toward recapturing 380+. Trade accordingly.

The NASDAQ experienced a significant afternoon recovery from this morning's dip. Looking at TSLA, though, the stock traded more-or-less horizontally instead for the remainder of the afternoon. Can you say "capping"?

Looking at short percentage of trading, Tuesday's 67% was two-thirds of total trading. Any wonder why the shorts have so much effect upon TSLA's stock price? Today we saw about 60% of trading done by shorts but much higher volume as the 336 support level gave way to substantial macro pressure.

Conditions:
* Dow down 112 (0.48%)
* NASDAQ down 35 (0.52%)
* TSLA 325.84, down 11.50 (3.41%)
* TSLA volume 8.6M shares
* Oil 52.12, down 0.06 (0.11%)

 

[nQva]

Good stuff Pappfox. I always enjoy reading your posts.

 

[Papafox]

Correction: the NASDAQ fell half a PERCENT yesterday.

 

[Papafox]

Today was an up and down day with lots of trading by shorts (63% of TSLA transactions, according to shortvolume.com). We saw an attempted mandatory morning dip shortly after open that failed to reach the red zone, we also saw a game of bop-the-mole with 15 shifts across the red-green line today. Most importantly, the shorts were not able to engineer the standard descent into closing that has been so effective in many previous sessions. This was on a day with somewhat negative NASDAQ macros, and the frosting on the cake was the ascent of more than $1 in after hours trading (at the time I write this). Overall I see shorts starting to fail in some of their manipulations and these failures could signal that we might be at the transition point from down to up, given the current news of the company.

Conditions:
* Dow up 71 (0.31%)
* NASDAQ down 7 (0.11%)
* TSLA 326.17, up 0.33 (0.10%)
* TSLA volume 5.0M shares
* Oil 52.69, up 0.05 (0.09%)

 

[Papafox]

TSLA closed at 328.29 in after-hours trading today. That's nearly $2 higher than market close. Between the apparent small victories against the shorts today and the after-hours rise of the SP, I'm optimistic about tomorrow's trading.

 

[GoTslaGo]

Cautiously optimistic as well. TSLA bounced off the hard lower 3SD Bands, and moving sideways from there. Also AMZN and GOOGL apparently did gangbusters, hopefully a little bit of a tail-wind for tech stocks. FWIW Max Pain is 340 for Friday... will we get there?

 

[neroden]

I'm expecting pre-earnings jitters to keep the stock down until earnings come out -- this just happened with both Amazon and Google. I'm not expecting a great earnings beat, however -- if there is one, TSLA will jump, but if there isn't, as I expect... well, I don't know. *shrug* I'm currently set up with short puts where I'm comfortable either way, but I do have to make different plans if they execute and if they don't.

 

[Papafox]

Although yesterday suggested that today would be a positive trading day (shorts lost some battles, SP closed in green, SP rose nearly $2 in after-market trading), the situation changed when both Google and Amazon announced big beats on their 3Q ERs. The stage was set for the NASDAQ having a huge up day and it didn't disappoint with a 2.2% gain for the day. On such a day, it is important in the strategy of the shorts to get a big enough dip going early in the morning to encourage traders to take their money to more reliable stocks for following the NASDAQ up and define TSLA as an underperformer (as usual) on such days. The shorts benefitted from negative interpretations of an Asian supplier of parts to Tesla being asked to cut back deliveries of those parts in the short run (no big surprise because of the several week delay already in ramping up Model 3 production) and from a price target downgrade by an analyst who somehow concluded that planned Model 3 2018 and 2019 Model 3 deliveries should be reduced. The net result was red trading at open which was exacerbated by long traders moving TSLA money to other NASDAQ stocks shortly after open and to the usual short-selling to induce as big a mandatory morning dip as possible.

Much of the rest of the day followed a predictable pattern. TSLA recovered most of the early morning losses by lunch time but then declined in the typically lower-volume, more easily manipulated afternoon hours. As close approach, volume picked up and TSLA climbed during the final half hour on buying pressure. We saw 65,000 shares trade hands at 3:59pm and 106,000 shares at 4:00pm. It is entirely possible that the late trading included many short sellers who were closing positions so as to carry on their manipulations next week.

In the technical chart, you can see that the 200 day moving average provided support. No doubt the shorts will retest that support, but if it holds until Wednesday, it will have served its purpose. Also, notice that the big price changes in TSLA has led to a widening of both the upper and lower bollinger bands. We are close to retaking the lower bb and the upper bb lying at 369+ gives lots of room to run if good news comes our way soon.

One of two developments would put a stop to the decline. A better than expected 3Q ER could cause a rise in the stock and mark the turnaround point. A slightly disappointing result could also ironically lead to an end of the decline because there is some dread about the ER at present and that dread disappears when the ER has come and gone (much like Neroden's speculation). The other cause to end the decline and get TSLA heading upward (likely at an enthusiastic clip) would be news that the Model 3 bottlenecks are falling by the wayside and Model 3 will soon be ramping up. Both the 3Q ER effect and the clarification of the Model 3 ramp issues very possibly could be resolved on Wednesday after-hours as the 3Q ER is presented. Even if Elon's clarification of the Model 3 ramp up issues includes additional delays, the clarification of what is going on will likely have a more positive effect than the current lack of information on the Model 3 ramp up. Finally, sightings of higher M3 VIN numbers this weekend (600s, 700s, etc.) could put some upward pressure on the stock Monday morning (keep your eyes open!). Don't be surprised to see Monday morning green turn into Monday afternoon red, though, because this has been the pattern lately and we may need to get through Wednesday before clarification allows TSLA to shake off the downtrend and find its mojo again.

For the week, TSLA closed today at 320.87, down 19.23 from last Friday's 345.10. No substantial negative news other than some bottlenecks in the Model 3 ramp up process has become known between the time TSLA fell from 360 to today's numbers. Better days lay ahead. Have a good weekend.

Conditions:
* Dow up 33 (0.14%)
* NASDAQ up 144 (2.2%)
* TSLA 320.87, down 5.30 (1.62%)
* TSLA volume 7.0M shares
* Oil 53.90, up 1.26 (2.39%)

 

[AlMc]

I would also suggest that the roughly 40 point drop over the last two weeks may not be just caused by 'shorts' but by mutual funds taking profit before their year's end (Oct 31st, but takes a couple days to settle so by close today).

Just another theory for the decline instead of it always being short activity.

 

[Navin]

Yep. Maybe fidelity exited their investment following this guys departure

Fidelity’s Star Technology Fund Manager Gavin Baker Departs

 

[TMSE]

Yep. Maybe fidelity exited their investment following this guys departure

Fidelity’s Star Technology Fund Manager Gavin Baker Departs

You would know if they changed their holdings from the 13F. It is due within 45 days after the end of quarter

 

[Papafox]

I would also suggest that the roughly 40 point drop over the last two weeks may not be just caused by 'shorts' but by mutual funds taking profit before their year's end (Oct 31st, but takes a couple days to settle so by close today).

Just another theory for the decline instead of it always being short activity.

Thanks for the suggestion. Certainly, the actions of mutual funds can be part of the action, but I stick with shorts as being a really big component of the drips partly because we've seen many days recently with greater than 60% of trading done by shorts and because of the patterns observed (mandatory morning dips, sticky dips on steroids, etc.). A more uniform decline of share prices during the day would be more indicative of funds readjusting their TSLA holdings. Instead, we see significant dips right on opening (not a good technique for selling stocks by a fund), capping of the stock price after a macro dip so as to keep the stock price down, lots of selling during the low volume times of day, etc. With selling patterns designed to keep the stock in a descent rather than selling patterns that would be appropriate for disposing of shares at the highest possible price, I feel confident that manipulations by short sellers is a very large part of the picture.

Where we agree is in a lack of buying by funds at the moment. The combination of low volume and a majority of TSLA trades involving shorts suggests that funds are not buying in significant volume and that's an important part of the problem, especially with funds holding a large percentage of TSLA. Traders are being careful with TSLA during the downtrend, and unseasoned TSLA longs who are small time investors have had much incentive to sell during this dip (many unseasoned longs haven't ridden out a dip like this before and are inclined to sell). With these lower prices and with Oct 31 soon to be behind us, perhaps the funds will shift gears in November and the stock price will get a boost from that. Fingers crossed.