Papafox's Daily TSLA Trading Charts

[Papafox]

Today was a surprise for many of us. Shorts have been making about 2/3rds of all trades this week and no news of significance came out today. Shorts have been successful at slowly wiggling the SP below 306, even though most investors show no strong inclinations to sell. Why then, did TSLA run up 9 and a half points? A few clues exist. At 8:01am we saw 860,000 shares trade hands in pre-market trading. The high-volume spurts with rising SP suggest that some institutional investor has been acquiring TSLA today, according to Curt Renz and others. But why? Our hope is that they have received some word or leak that the Model 3 production bottlenecks are being resolved. Looking forward to some news to justify the run up within a day or two. AlMc suggests that today's run up might instead be about mutual funds readjusting their holdings prior to 2018, which many individuals think will be a good year for TSLA.

Looking at the daily trading, you can see the shorts giving a robust mandatory morning dip right after open in an unsuccessful effort to push the stock price below 300 and unnerve the longs. Alas, TSLA shot back into the green to nearly 306 before shorts went to work hammering the stock price down into the red. A game of wack-the-mole ensued for nearly two hours as shorts expended ammo in an effort to minimize damage by keeping TSLA just below the red/green line. As noon approached, efforts to prevent TSLA from rising failed as some large buyer continued to accumulate shares and the shorts lost control.

One of the implications of today's move is that some shorts are likely getting unnerved. Why did someone want to acquire so many shares today? Tomorrow could be an interesting day for this reason.

Looking at the technical chart, you can see that TSLA rose from sitting on the lower bollinger band to finishing the day above the bb and only $7 below the upper bb. Taking a look at the 200 day moving average at 324.xx and the 100 dma at 326.95, you can see that another day like today would put TSLA near these critical technical indicators and bring out technically-oriented investors.

Conditions:
* Dow down 40 (0.16%)
* NASDAQ up 14 (0.21%)
* TSLA 313.26, up 9.56 (3.15%)
* TSLA volume 7.2M shares
* Oil 55.96, down 1.66 (2.88%)

 

[neroden]

I, with what little knowledge I have, agree with the institutional accumulator theory. I have absolutely no guess as to what institution it might be. Obviously we won't know for months (unless someone got 5%).

 

[Papafox]

Today the mystery big buyer of TSLA from yesterday apparently scaled back the buying, which allowed the stock to do a slow decline from noon into close. Interestingly, the first and last minutes of trading today showed lots of shares trading hands, with 104,000 shares trading hands at opening and 171,000 shares trading hands at close. One possible explanation is that someone is accumulating with an eye toward not driving up the price during the accumulation process.

The game of where TSLA heads from here still depends upon Model 3 production ramp, with shorts and bears expecting prolonged delays in Model 3 ramp and bulls looking for reasonable progress. Today, Tesla opened Model 3 configuration to a second group of non-employees and he have see a VIN # sighting in the wild above 2,000, which suggests progress in ramping up Model 3 is being made, though at a pace which still leaves much room for improvement.

Conditions:
* Dow up 71 (0.29%)
* NASDAQ up 36 (0.54%)
* TSLA 311.24, down 2.02 (0.64%)
* TSLA volume 4.8M shares
* Oil 56.62, up 0.66 (1.18%)

 

[Papafox]

Today we saw the shorts unable to manufacture a mandatory morning dip. Not surprisingly, TSLA ran up to a peak a bit before 11am. From here, we could expect a dip, but would it be a dip into the red through close or would there be a streak of buying in the afternoon that would propel it even higher? Despite a declining NASDAQ as the day progressed, TSLA rallied after 2pm and closed up for the day and for the week on unusually low volume.

Looking at the www.shortvolume.com chart, you can see unusually high pressure on TSLA by shorts over the past two weeks as short percentage of trading climbed to a remarkable high of more than 2/3rds total trading on Monday, December 4. On that day, shorts put in a major effort to pull TSLA below 306, which they could not hold for the day. On Tuesday, super-high percentage of short trading continued and shorts were able to nudge the stock down a couple dollars. On Wednesday, some large buyer, likely an institution, felt it was time to start accumulating in a big way, perhaps by seeing the difficulty shorts were having at depressing the stock much and the likelihood of many buyers emerging as TSLA approached 300. Thus buying picked up and TSLA closed up over $9 that day. Thursday we saw a slow descent into the red in the afternoon as the buying slowed down, but buyers returned on Friday and we enjoyed this up day.

Judging by how TSLA is trading, I would say that TSLA traders, both longs and shorts, are watching the stock carefully and often buying out of fear. Typically, when longs are holding off on buying, shorts are selling into new positions or churning shares by selling at critical times and buying at times not likely to nudge the SP upward much. We are seeing sticky dips gaining some ground for the shorts, but the steepest movements are upward when longs see the SP rising and start jumping aboard, fearful that someone knows something about the Model 3 ramp up that they don't and they don't want to miss the train. The significance of this week is that even with little news regarding production ramp up, the stock recovered ground lost last week. The implication is that the perception that Model 3 ramp up is coming fairly soon is providing positive support for the stock price at present and that we will likely see a robust run up when actual news of Model 3 production ramp up comes. The downside risk would be if word emerged that a longer-than-expected delay of Model 3 ramp has developed, in which case the positive support that we saw this week would dissipate.

Looking at a wider time period for the technical chart, you can see the general upward trend from 292.63 to about 320, a robust short-selling-induced dip to 300, and then a recovery on Friday bringing us reasonably close to the 320 price range again. I would feel very comfortable seeing TSLA trading between 315 and 320 until word of Model 3 production ramp up comes, at which time I think the upper bollinger band, which stands at 320.30, would not limit the upward breakout. We're simply too close to that number now and significant news of Model 3 ramping up would be huge news for this stock.

For the week, TSLA closed at 315.13, up 8.60 from last Friday's 306.53. It has been a good week. Enjoy your weekend.

Conditions:
* Dow up 118 (0.49%)
* NASDAQ up 27 (0.40%)
* TSLA 315.13, up 3.89 (1.25%)
* TSLA volume 3.5M shares
* Oil 57.36, up 0.67 (1.18%)

 

[Papafox]

Take a look at these videos on the TSLA market action thread. Very hopeful signs appearing in regards to the Model 3 ramp up.

 

[Papafox]

Today was a more significant day than just seeing a rise of nearly $14 in the stock price. TSLA also managed to rise above both the 50 and 200 day moving averages. The stock was set up to do a "death cross' by tomorrow, in which the 50 dma crosses below the 200 dma, and this would have been seen as bearish by technical traders. Instead, we saw TSLA zoom above both the 50 and 200 day moving averages, and this is bullish because while these numbers worked as resistance on the way up, they will work as support if TSLA can establish itself above these numbers. Naturally, the most stubborn shorts will do everything in their power to artificially force TSLA back below 320 asap, if they can, but with such a bullish day, and with such significant upward room to run for this stock in the coming year, the shorts may be unable to accomplish their manipulations.

Why did the stock price run up today?
* We saw a big reason yesterday as videos started to surface on youtube regarding over a hundred Model 3s awaiting delivery at the Freemont delivery center. It took a while for the broader investment community to figure it out, but we had postings on this thread and the TSLA market action thread yesterday regarding this large number of Model 3s. The implication is that some type of Model 3 bottleneck may have been removed, allowing a nice jump upward in production numbers. If this jump up is confirmed by additional jump in number of Model 3s available for delivery, expect further increase in the stock price. Successful ramping up of Model 3 is THE biggest issue facing Tesla at this time.

* Consider the possibility that last week Wednesday's surprise jump in buying could possibly have been a large institutional investor who was tipped off by an employee or someone close to the Tesla production process. With hundreds of people who would be aware of a significant increase in Model 3s produced, it only takes one to spill the beans.

* Another theory being floated is that TSLA ran up because a number of important Tesla developments have recently become known. Analysts such as Adam Jonas attach significant value to Tesla's full autonomy feature, and recently Elon revealed that his chip expert (formerly of AMD and Apple) was busy at work on an advanced ai hardware platform for Tesla's use. The implication is that Musk and others have realized that substantial hardware processing power is needed for fully-autonomous driving, and the development of this powerful in-house hardware will solve a problem that has been preventing Tesla from moving forward faster with full autonomy.

Looking at the technical chart, you can see that TSLA rose above both the 50 and 200 day moving averages today. Expect to see stubborn shorts doing what they can to get TSLA below those numbers. Tomorrow could see a tug-of-war in the morning hours or an attempt to decline below 320 in the afternoon. On the other hand, shorts are shaken by today's developments, and some will be ready to throw in the towel, take a profit, and cover. If covering picks up, the shorts who are covering can become a real pain for the shorts who are still manipulating. For this reason, I would be more inclined to see a battle tomorrow morning than in the afternoon.

As expected, the upper bollinger band did not act as a major resistance point. The upper bb was simply too close to the current stock price before the jump and the reason for the jump was far too important for the upper bb to hold things up too long.

Congratulations, longs, on a good day! Keep your eyes on Model 3 production and delivery numbers to see if they reinforce the assumptions that propelled TSLA higher today.

Conditions:
* Dow up 57 (0.23%)
* NASDAQ up 35 (0.51%)
* TSLA 328.91, up 13.78 (4.37%)
* TSLA volume 7.9M shares
* Oil 58.00, up 0.64 (1.12%)

 

[Papafox]

After hours close price: $ 330.10
Market close price: 328.91
After hours gain: $ 1.19
Translation: Increasing demand for TSLA in after-hours trading suggests some buying pressure carries over to tomorrow

 

[Papafox]

341 anyone? Congrats longs on another excellent day. The after-hours trading yesterday hinted that today could be positive, and it certainly was. I was expecting shorts to make a downward play in the morning or in the late afternoon hours, but with other shorts jumping ship and covering, nothing of significance was possible. Volume of more than 8 million shares aided the longs, and TSLA remained immune from the influence of NASDAQ trading today, which was good because the NASDAQ was basically on a downward trajectory from noon onward.

Some of the media outlets list the 100 semi-trucks order by Pepsi as the reason for today's rally, but I think that order was merely one of several catalysts for the good day. The Pepsi order does indeed change the game a bit, because unlike orders for 10 or so trucks (that enable a company to test the technology), the Pepsi order starts serious numbers piling up for the semi-truck, and nobody wants to be too far back in the queue when the product can transform the economics of an enterprise. Thus the Pepsi order places more pressure on other large trucking organizations to place big orders too, and between deposits for the Roadster 2 and the Semi Truck, Tesla is realizing some nice cash flow which will become known in the Q4 ER. Meanwhile, locations in Europe, Canada and elsewhere are reporting large deliveries of existing Tesla vehicles, which might suggest a surprise to the upside in Tesla's deliveries in the quarter. Cha-ching.

Looking at the technical chart, you can see that the 50 and 200 day moving averages are secured now and if the 100 day is somewhere around 338, it has been topped too. What we've seen the last two days is an earthquake that reminds the shorts that this stock is rising like a Falcon 9 sometime soon. Expect more shorts to exit as additional good news comes forth.

Conditions:
* Dow up 119 (0.49%)
* NASDAQ down 13 (0.19%)
* TSLA 341.03, up 12.12 (%)
* TSLA volume 8.7M shares
* Oil 57.27, down 0.72 (1.24%)

 

[Papafox]

Here is a graph of short activity for the past month of TSLA trading. I suspect the extremely high numbers reached in the beginning of December were caused by short-selling in an attempt to keep TSLA from rising. There was a brief decline in percentage of activity by shorts and then the shorting percentage picked up again to high (high 50s-low 60s) numbers, which I think indicates a fair amount of covering of shares taking place.

Another interesting number is the really large 375,000 shares that traded in the final minute of market trading today. I interpret these numbers as mostly being shorts covering in a fashion that will prevent the SP from rising as they cover. If these shorts are covering but trying not to raise the SP upon their exit, that suggests to me that the shorts have additional short positions which still need to be covered if these shorts suspect the SP is going to continue higher.

 

[neroden]

I have an alternative interpretation of the very large premarket, aftermarket, last-minute trading moves: I think we're witnessing some institutional accumulation with an attempt to not pull the stock price up. It might be shorts covering, but it might be the institutional accumulator continuing to accumulate.

 

[Jonathan Hewitt]

Mostly buying by longs if Ihor's data is to be trusted.

Ihor Dusaniwsky on Twitter

 

[Papafox]

Neroden and Jonathan Hewitt,
Thanks for the input. I was previously attributing the large market-open, market-close bumps in volume to an institutional investor or investors and looks like there's evidence that's what's happening now. Ihor Dusaniwsky should know that it isn't shorts covering. What's interesting is that if shorts aren't covering, how do you account for the shorts accounting for 60% of the trading and the SP still running up a dozen dollars a day? Are they still adding shares? I'd think that would be rather suicidal in such an upturn. More likely, they're staying relatively neutral through equal buying and selling, but that game is expensive when the stock price is moving uphill at a good clip. What will the picture look like when shorts do start covering? Covering would raise the SP as both longs and shorts compete for shares. Yum yum.

 

[Papafox]

Pardon the delay, I was under the weather all day. Today was another important trading day for TSLA, with word leaking out that the Senate version of the U.S. tax plan that emerges from committee is likely going to contain continued EV tax credits. Then, just as TSLA was moving about its high for the day shortly before noon, word came down about a billion dollar equity raise that Tesla was planning. That news provided enough ambiguity so that shorts were able to walk the SP down until it started recovering about 12:30pm.

I had expected the shorts to jump in with both legs and challenge TSLA's rise yesterday, but that challenge actually came this morning instead. Looking at the www.shortvolume.com numbers for today, we're over 65% of trading being done by shorts, which is pressing the very highest limits. Look at the two deep dips in the first hour of trading today, with immediate near recovery. It is classic mandatory morning dip manipulation by the shorts. The bad news is that the shorts are definitely on the war-path. The good news is that, at least today, their substantial efforts didn't bring them much of a change in the stock price.

The billion dollar equity raise will be a net positive for Tesla once it is completed. It's smart to have plenty of money in the bank, because if the economy takes a hard jolt, money could suddenly be hard to raise. Tesla is playing it smart. I wouldn't be surprised if TSLA announces a China (giga)factory soon if the political chips fall into place.

Looking at the www.shortvolume.com data, you can see TSLA shorts are up to near-historic highs in their percentage of trading. When the Model 3 ramp up is confirmed, TSLA is going to be up to the earlobes in shorts, many of whom will need to exit as margin calls start coming in. Can't wait.

Conditions:
* Dow up 81 (0.%)
* NASDAQ up 13 (0.%)
* TSLA 339.03, down 2.00 (%)
* TSLA volume 6.2M shares
* Oil 56.78, up 0.18 (0.32%)

 

[pz1975]

How did I not see the news of a $1 billion equity raise mentioned on this site until your post here?

 

[AlMc]

How did I not see the news of a $1 billion equity raise mentioned on this site until your post here?

I am still googling to try to find it????

 

[pz1975]

I am still googling to try to find it????

I couldn’t find it either. Maybe Papafox is really under the weather to the point of delusions...

 

[erthquake]

Only thing I could find was this Tweet.

Rob Forth on Twitter

Not exactly an authoritative source.

 

[ValueAnalyst]

Only thing I could find was this Tweet.

Rob Forth on Twitter

Not exactly an authoritative source.

Can't see it... oh yea, I have that idiot blocked.

 

[Papafox]

I've been in bed all day with the flu and didn't do my normal fact checking. The article on a Tesla capital raise that I read was dated March 17, 2017. Oops. Cancel the cap raise for now. Thanks to all of you for pointing this out.

 

[JeffreyY]

I've been in bed all day with the flu and didn't do my normal fact checking. The article on a Tesla capital raise that I read was dated March 17, 2017. Oops. Cancel the cap raise for now. Thanks to all of you for pointing this out.

Hope you feel better soon.